2012 inflation at 3.2%, a 5-yr low

MANILA, Philippines (UPDATED) – The country’s inflation rate was 2.9% in December 2012, bringing the full year average to 3.2%, according to data released by the National Statistics Office (NSO) on Friday, January 4. 

The 2012 average fell near the low end of the government’s 3% to 5% target, and was the slowest since the 2.9% in 2007, the year before the global financial crisis began.

“This supports our outlook that inflation is manageable,” Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. told reporters in a text message.

“The risks to inflation over the policy horizon remain fairly balanced. This, together with the expectation that real GDP (gross domestic product) growth would continue to be strong, suggests our current policy settings are appropriate,” he added.

The December figure inched up from the 2.8% recorded in November 2012, but was lower than the 4.2% recorded in December 2011. 

The slight increase in inflation last month was due to the faster rise in heavily weighted food and beverage prices. The food and beverage index posted an inflation rate of 2.3%, against 2.2% in November.

Lower fuel and electricity prices kept inflation in check. The NSO said the annual hike in the housing, water, electricity, gas, and other fuels index slowed to 3.6% in December from 3.7% the month before.

“Consumer prices moved by -0.1% in December from 0.1% growth in November. This was due to the decreases in the prices of food items such as vegetables, cooking oil and sugar. Lower charges in electricity rates and price roll backs in LPG and kerosene in selected regions were also noted during the month,” the NSO said.

Inflation in the National Capital Region (NCR) accelerated to 2.8% from 2.6% due to higher prices of food and non-alcoholic beverages; alcoholic beverages and tobacco; housing, water, electricity, gas, and other fuels; health; communication; and recreation and culture. Outside NCR, annual inflation was steady at 2.9% in December.

Excluding selected food and energy items, core inflation eased to 3.3% in December from 3.4% in November. The full-year core inflation rate slowed to 3.7% in 2012 from 4.3% in 2011. – Rappler.com