Inflation slows to 1.8% in August on lower food prices
MANILA, Philippines – Even though the country entered the rainy season, stable food prices ensured that inflation dipped in August of this year.
Data released by the National Economic and Development Authority (NEDA) on Tuesday, September 6, showed that inflation slowed to 1.8% last August from the 1.9% recorded in both June and July.
Socioeconomic Planning Secretary Ernesto Pernia added that the manageable inflation observed is set to continue for the rest of the year with the government expecting full-year inflation to settle at the lower end of the 2%-4% target.
Food prices stable, utilities up
The dip was largely because food inflation slowed down to 2.5% in August from 2.8% in the previous month. This was due to slower price adjustments of meat, vegetables, and corn, which tempered higher prices of rice, fruits, sugar, and non-alcoholic beverages, according to NEDA.
"Food inflation will stay stable given ample supply of palay and corn, which could keep upward price pressures at bay," Pernia said.
Rice inflation, however, increased to 0.5% from the 0% in July which NEDA attributed to the decline in rice production and low levels of stock in the country due to El Niño, Typhoon Nona during the 4th quarter of 2015, and monsoon rains last January.
Pernia said the plan to import more rice through next year will also add to the country's buffer stock and ensure that overall food prices remain stable.
By contrast, the non-food group registered higher inflation of 1.1% in August from 0.9% in July driven by higher prices in housing, water, electricity, gas and other fuels, transport, furnishings, household equipment, clothing and footwear, health, restaurants, and other goods and services.
NEDA also noted that higher global oil prices due to a pickup in global oil consumption and slowdown in crude oil production was a concern.
Because of this, Pernia said, there is a need to ensure that prices of utilities such as electricity and water are stable.
"Existing petitions for upward adjustment in power prices should be reviewed comprehensively as it remains an upside risk in inflation rates," he added. – Rappler.com