Inflation lowest at 3.7% in November
MANILA, Philippines – (UPDATED) Thanks to lower food and local petroleum prices, and electricity rates, inflation for November was at its lowest at 3.7%, the National Economic and Development Authority (NEDA) reported on Friday, December 5.
In October, inflation also went down for the second consecutive month to 4.3%.
For the 11-month period, the inflation rate stood at 4.3%, which is within the 3% to 5% full year inflation target of the Development Budget Coordination Committee (DBCC), said Socio-economic Planning Secretary Arsenio M. Balisacan.
“This further easing is good news for our economy,” Balisacan said in a statement.
The November inflation reading was also within the Bangko Sentral ng Pilipinas (BSP) forecast range of 3.5% to 4.3% for the month.
BSP Governor Amando M. Tetangco, Jr. said that the latest inflation reading is in line with the central bank's assessment of a manageable inflation environment over the policy horizon.
Food prices, however, may increase this Christmas season, and anticipated damage from Typhoon Ruby may cause an uptick in prices, the NEDA chief said.
“Given the country’s vulnerability to disasters arising from natural hazards, the government needs to remain vigilant in ensuring adequacy of supply of commodities to keep prices stable,” Balisacan said.
Food accounts for about 90% of inflation.
Food inflation slowed down to 6.7% in November from 7.2% in October this year.
Lower price increases in food backed this slowdown, on its third consecutive month.
Inflation of rice, accounting for about 25% in the food consumer price index (CPI), started to ease in November with higher rice stock inventory and importation.
Palay production is expected to recover in the fourth quarter of 2014 and this could further ease price pressures on rice in the coming days.
But as Ruby (international codename: Hagupit) has entered the Philippine area of responsibility, farmers along the typhoon path are urged to harvest their maturing crops before the typhoon makes landfall on Saturday evening, December 6.
Meanwhile, Dubai oil prices fell to its lowest levels since 2010.
As such, lower domestic petroleum prices or double-digit price reductions were observed for unleaded gasoline, diesel, kerosene, and liquefied petroleum gas (LPG).
The reduction in fuel prices and improved availability of power plants also pulled down electricity rates.
In particular, the generation charge of the Manila Electric Company (MERALCO) went down by 9.9% in November this year.
The NEDA also said that the lower inflation rate was felt across regions.
In the National Capital Region (NCR), the inflation rate went down to 2.4% from 3.6% in October.
Areas outside of NCR also noted lower price increases, resulting in overall lower inflation at 4% in from 4.5% in October 2014.
The government remained optimistic in the country’s overall economic growth, despite a laggard third quarter gross domestic product growth of 5.3%.
The economic activity in the Philippines is expected to remain firm due to buoyant domestic demand, a strong external position, and favorable consumer and business sentiment, Balisacan said.
For its part, BSP said it will remain vigilant in monitoring developments on both the global and domestic fronts and "stand ready to undertake appropriate measures, as needed, to safeguard its price stability objectives." – Rappler.com