November inflation slows to 2.8%

MANILA, Philippines (UPDATED) – The pace of increase in prices of goods and services slowed to 2.8% in November from 3.1% in October, the National Statistics Office (NSO) said on Wednesday, December 5.

The NSO reported that inflation in the January to November period was at 3.2%, well within the government’s inflation target of 3% to 5%. In November last year, inflation was at 4.7%. 

With the slowdown in the country’s inflation rate, Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. remains confident that inflation will be benign this year and in the next two years. 

Tetangco said inflation in 2013 and 2014 may average around 4% or lower. The BSP eyes to keep inflation within the 3% to 5% range until 2016, when President Benigno Aquino III ends his term.

“On the inflation side, there can be movements in the inflation rate but overall, the average would be well within the inflation target range. In fact, I would expect that it would be within the lower half of the target range so 4% or less, for both years,” Tetangco said. 

He added that with the low inflation forecast for 2013 and 2014 as well as the strong economic growth of 6.5% in the first 9 months, the current monetary policy stance was still appropriate.

However, Tetangco said there can be changes along the way, depending on factors affecting inflation and economic growth.

The government’s growth target this year is 5% to 6%, but the National Economic and Development Authority said growth may fall between 6% and 7%, given the country’s robust performance in January to September.

Cheaper food, utilities

The NSO said the lower inflation rate in November was mainly due to the slowdown in the prices of food and non-alcoholic beverages; housing, water, electricity, gas and other fuels. 

Data showed that the food and beverage index slowed to 2.2% in November; housing, water, electricity, gas, and other fuels index slowed to 3.8%. The transport index also slowed to 1.3%. 

Inflation in the National Capital Region (NCR) eased to 2.6% in November, while inflation outside NCR also slowed down to 2.9%.

Excluding volatile food and energy items, core inflation was 3.4% in November. – Rappler.com