Data [1]
The Philippines faced a problem - inflation rose to 4 percent in January, up from 3.3 percent in December. This exceeded all forecasts. Of course, people were told that it was temporary and there was nothing terrible here:
“We think these are temporary drivers of inflation and would eventually stabilize”
— Governor Nestor Espenilla [2]
But in February, inflation rose to 4.5%. What to do now?
'NO PEACE IN OUR GENERATION.' President Rodrigo Duterte will only resume peace talks with the Left if there is a 'compelling reason' to do so. File photo by Ace Morandante/Presidential Photo. Image source: [3]
Rodrigo Duterte loves to solve problems radically. And this situation was no exception. Duterte's government simply changed the method of calculating - (CPI) Consumer Price Index:
Base year for CPI updated to 2012 from 2006
Update to reflect change in consumption pattern [4]
Easy for Duterte...
“I don’t agree that the new base year, which is lower than the reading for the old base, should be a cause to make an excuse for a no rate hike scenario”
—Euben Paracuelles, an economist at Nomura Holdings Inc. in Singapore. [5]
References:
[1] https://tradingeconomics.com/philippines/inflation-cpi
[2] Alegado, S., & Lopez, D. B. (2018, February 05). Philippine Central Bank Pledges Timely Action as CPI Surges. Retrieved March 12, 2018, from https://www.bloomberg.com/news/articles/2018-02-06/philippine-inflation-surges-to-highest-in-more-than-three-years
[3] Ranada, P. (2017, February 6). Duterte calls communists 'spoiled brats'. Retrieved March 12, 2018, from https://www.rappler.com/nation/160656-duterte-communists-spoiled-brats
[4] UPDATE 1-Philippines to update inflation gauge, but target unchanged. (2018, February 22). Retrieved March 12, 2018, from http://www.kitco.com/news/2018-02-22/UPDATE-1-Philippines-to-update-inflation-gauge-but-target-unchanged.html
[5] Durden, T. (2018, March 6). Philippines Changes Inflation Calculation After CPI Shows Overheating Economy. Retrieved March 12, 2018, from https://www.zerohedge.com/news/2018-03-06/philippines-changes-inflation-calculation-after-cpi-shows-overheating-economy