August inflation low despite strong peso, bad weather
MANILA, Philippines – August inflation fell to its lowest level since August 2009 amid continuing peso depreciation and weather disturbances, which tend to cause spikes in prices of goods and services.
August inflation eased to 2.1% from July's 2.5%, according to data from the National Statistics Office (NSO) released on Thursday, September 5.
Year-to-date inflation now stands at 2.8%, well within Bangko Sentral ng Pilipinas' (BSP) inflation target of 3% to 5% this 2013.
Lower power rates by Manila Electric Co. (Meralco), which supplies electricity in Metro Manila and nearby areas, as well as lower international oil price in August was cited by Economic Planning Secretary Arsenio Balisacan as the two main reasons for the improved August inflation rate.
“This reflects the lower generation charge of Manila Electric Co., which is now able to source power strategically from suppliers with lower cost, and the decline of international crude price during the period,” Balisacan said in a statement.
Other non-food items that contributed to the lower inflation in August included personal transport equipment (2.9% from 5.6%) and transport services (0.3% from 0.4%). Tobacco, clothing and footwear, furnishing, household equipment also posted slower annual price hikes.
Prices of food items remained stable despite the typhoons. "Despite the adverse effects of typhoon Labuyo and tropical storm Maring, inflation rate of most food items declined on an annual basis. Metro Manila prices of meat and several vegetable items were even lower than in the previous year."
Vegetable prices nationwide were 2.6% cheaper compared to a year ago, while slower price hikes were recorded for meat, fish, fruits and other food products and beverages.
Seasonal supply disruptions led to a higher price of rice, a staple food, in Metro Manila. General rice price index rose to 3.9% in August from 2.4% in July.
There were buffers, however. The Bureau of Agricultural Statistics (BAS) reported annual reductions in the prices of fully dressed chicken by 4.9%, and several vegetable items like ampalaya by 39.2%, sitao by 34.3%, cabbage by 60.8%, carrots by 49.1%, baguio beans by 31.5%, white potato by 17.7%, eggplant by 31.6%, native pechay by 48.4%, and calamansi by 10.7%.
BSP Governor Amando Tetangco said the benign inflation gives the central bank room to further adjust policy rates, if needed, to address possible effects of "geopolitical concerns in the Middle East that may impact on the international prices of commodities as well as developments on the domestic front that may raise volatility in domestic prices." - with reports from Cherrie Regalado/Rappler.com