April 12, 2023

Philippines' effort to control inflation risked being hampered by ASF infections 

African swine fever is spreading and threatening the Philippines' hog industry, government data showed, raising concerns it might stall the headway authorities have made in fighting inflation.

ASF have been detected in more than three-fourths of the Southeast Asian country's 81 provinces as of April 3, based on latest data from the Bureau of Animal Industry. The government has not given official figures on how many hogs had been affected.

The country's inflation cooled to a six-month trough of 7.6% in March, the second month in a row that price increases have slowed from a 14-year high in January. But central bank Governor Felipe Medalla is wary of celebrating just yet, and wants to see sustainably low month-on-month inflation.

"ASF will remain a risk as it has been in the last two years, especially if global pork prices go up with China's reopening," said Dan Roces, chief economist at Security Bank Corp. in Manila. "To retain the headway in the fight against inflation, (the) government must need to be anticipatory."

Pork is a key component of the Philippines' food basket, which accounts for over a third of the consumer price index. In the first quarter of 2021, an ASF outbreak reduced hog production by a fourth in the country, prompting authorities to push for repopulation and a temporary cut in tariff rates.

- Bloomberg