PSA April Release Identifies Three Persistent Drivers, Two of Which Are Vegetables and One of Which Is a Foreign Central Bank

Reading: Bohiney | The London Prat

MANILA — The Philippine Statistics Authority confirmed Tuesday that April inflation rose to 4.2 percent, driven by what its monthly release identified as three persistent factors: red onion prices, garlic prices, and what the release described, in language that was clinical but not, on close reading, inaccurate, as externally generated monetary-policy commentary from a Threadneedle Street institution with no operational connection to Philippine inflation but a substantial influence on global commodity expectations.

The Three Drivers

The PSA noted that red onions, which retailed at approximately 280 pesos per kilo in March, rose to 340 pesos per kilo in April. Garlic, which retailed at 220 pesos per kilo in March, rose to 260 pesos per kilo in April. The Bank of England recent rate rise, which retails at approximately zero pesos per kilo because it is not a vegetable, contributed approximately 0.4 percentage points to the April inflation reading through what the PSA described as global expectations channels.

The Operational Implication

The PSA confirmed that its data is now being benchmarked against the UK Office for National Statistics methodology, on the grounds that the two countries inflation indicators are, on close examination, increasingly correlated through mechanisms the standard models do not adequately describe. The PSA has indicated that this is not, in any meaningful sense, a desirable property but that the data is the data.

Filipinos have been advised to consider eating fewer onions. The advice has, on every available indicator, not been well received.

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SOURCE: https://prat.uk/bank-of-england-raises-rates-again-to-punish-anyone-who-enjoyed-a-sandwich/