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The Philippine Ports Authority said the reduction in transport and logistics costs has been a significant factor in tempering inflation in August 2024
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The transport index recorded an annual decline of 0.1% in August from a 3.6% year-on-year increase in July 2024
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PPA said decline in the transport index in August “was largely influenced by several factors, including lower fuel prices, improved transportation efficiency, and competitive tariffs in the logistics sector”
Cuts in transport and logistics costs were a significant factor in tempering inflation in August 2024, the Philippine Ports Authority (PPA) said in a statement.
Headline inflation slowed to 3.3% in August this year from 4.4% in July due to the decrease in food inflation, according to the Philippine Statistics Authority.
Also contributing to the downtrend was transport with an annual drop of 0.2% during August from a 3.6% annual increase in July 2024.
“This shift was largely influenced by several factors, including lower fuel prices, improved transportation efficiency, and competitive tariffs in the logistics sector,” PPA said.
The ports authority noted these developments “have been crucial in easing the cost of moving goods, benefiting both businesses and consumers.”
Moreover, PPA said the government’s infrastructure improvements played a key role in reducing transportation costs.
Investments in road networks, enhancement of public transportation systems, and upgrades to port facilities have contributed to smoother traffic flow and faster logistics operations, PPA said.
It added that the “reduction in congestion has allowed for quicker delivery times and reduced fuel consumption.”
“Additionally, steady port tariffs have helped create a more predictable cost structure for businesses reliant on imports and exports,” PPA said.
“As logistics costs declined, consumer prices in various sectors also stabilized,” PPA noted.
It said products ranging from food to electronics benefited from lower transportation costs, keeping prices in check despite persistent global inflationary pressures.
“For low-income households, which are particularly vulnerable to inflation, the easing of transport costs has provided some relief, especially in basic necessities like food and essential goods,” PPA said.
The ports authority said the government’s commitment to keeping transport fees competitive “has added a layer of predictability for businesses, encouraging more efficient operations.”
“For Filipino consumers and businesses, the decline in logistics costs offers some breathing room,” PPA said.
It noted, however, that challenges remain on the horizon: “Global uncertainties, such as supply chain disruptions, fluctuating fuel prices, and geopolitical tensions, could potentially reverse this trend. Economists caution that while the current slowdown in inflation is promising, vigilance is necessary. The government must continue its efforts to boost economic resilience, address food security concerns, and keep inflation under control to avoid potential price shocks.”
The port agency said with continued investment in infrastructure and policies designed to improve productivity, the Philippines could maintain price stability despite external challenges.
While inflation remains a concern, particularly with ongoing global uncertainties, PPA said the drop in transport costs is a positive step toward managing price levels and supporting economic stability.
“As the government moves forward with infrastructure projects and economic reforms, the outlook for inflation control remains hopeful,” PPA said.
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