Inflation picks up in April
MANILA, Philippines – The country's inflation rate picked up in April due to higher food and utility prices, according to the government statistics agency.
Data from the Philippine Statistics Authority (PSA) showed inflation stood at 4.1% in April, faster than the 3.9% registered in March, and the 2.6% recorded in April 2013.
Despite the increase, the government said commodity prices would remain "manageable" for the rest of the year as it addresses "upside risks."
Inflation in the first 4 months was 4.1%, well within this year's target of 3% to 5% for 2014, said Economic Planning Secretary Arsenio Balisacan.
According to the PSA, inflation accelerated in April because of faster increments in the prices of food, electricity and petroleum products.
“Tightness in the country's rice supply persisted last month, resulting in higher prices of rice during the period. Similarly, the relatively higher corn prices may be attributed to lower production of corn resulting from dry spells in a number of corn-producing regions,” said Balisacan.
The Cabinet official added that rising crude prices in the world market pushed up the prices of local petroleum products.
“The domestic prices of unleaded gasoline, diesel, kerosene and LPG recorded faster adjustments last month. These are also consistent with the Dubai crude price, which increased by 3% in April 2014, coming from a 1.2% annual contraction in the previous month,” he said.
Electricity prices, meanwhile, went up as power distributor Manila Electric Company raised rates on account of a P0.51 per kilowatt-hour increase in the generation charge. “This was due to higher power costs from suppliers resulting from the several outages in large power plants, coupled with the increase in demand [this] summer season,” noted Balisacan.
Balisacan said that the government was addressing the upside risks to inflation to ensure steady economic growth. He said these risks include food price increases due to weather disturbances such as El Niño, the depreciating peso, and pending petitions for further adjustments in utility rates, transport fares, and wages.
“In the short term, the interventions can focus on improving the management of inventory, including that of imports, and the efficiency of the distribution systems. In the medium term, we need to focus on increasing the productivity of agriculture and the food processing industries as well as expanding production capacity,” he said. – Rappler.com