The National Economic and Development Authority (NEDA) on Thursday expressed its apprehension on the recently approved fare hike for public utility jeepneys and buses and noted its potential inflationary' impact.
NEDA director general Ernesto Pernia, at the sidelines of the EU-Philippines Business Summit in Parafiaque City, warned the public that anything that increases the cost of something heightens inflation.
"Well, anything that increases the cost of service increases inflation)" said Pernia, who is also the Socioeconomic Planning Secretary,
"I think, we only approved 50 centavos ... Additional 50 centavos."
The P0.50 is a theoretical fare increase that forms 'part of a scenario conveyed by NEDA to the Land Transportation Franchising and Regulatory Board (LTFRB) on the inflationary impact of an increase in jeepney and bus fares.
Pernia acknowledged the NEDA is still in the dark as to how the fare increase will actually impact on inflation, adding that the agency will have to compute what the quantitative effect of the fare hike will be.
The LTFRB recently approved increasing the minimum jeepney fare to P10, as well as provisional fare adjustments for bus operations in both Metro Manila and the provinces. The fare hikes will take effect 15 days after being published in a newspaper of general or local circulation.
LTFRB Chairman Martin Delgra III said the board will publish the orders on Friday.
Pernia acknowledged the NEDA is still in the dark as to how the fare increase will actually impact on inflation, adding that the agency will have to compute what the quantitative effect of the fare hike will be.
In a letter addressed to Delgra dated 2 October, NEDA Undersecretary Rosemarie Edillion said the provisional increase approved by the LTFRB should lift the annual inflation rate only slightly by 0.076percentage point if implemented starting October.
"Its inflationary impact will, however, result in higher inflation in 2019 as it is estimated to contribute 0.221percentage point to the
country's annual inflation next year," Edillon said.
Filipinos have been reeling from soaring prices of basic goods and prime commodities as inflation hits a nineyear high of 6.7 percent.
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