ASEAN KEY DESTINATIONS
Inflation eases to 3.1% in Q2
Philippines: Inflation or the rate of upward adjustments in the prices of goods and services eased slightly in the second quarter of the year amid steady movement in the prices of food and non-food items, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.
Data released by the central bank showed that headline inflation during the quarter was slightly slower at 3.1 percent compared to 3.2 percent record in the first quarter.
"Both food and non-food inflation during the review quarter remained generally steady vis-a-vis the previous quarter," BSP Director for Economic Research Zeno Abenoja said during a press briefing at the central bank headquarters in Manila.
"Food inflation in second quarter held steady compared to the previous quarter as higher prices of selected food commodities, specifically meat and fish, were counterbalanced by lower prices of vegetables and fruit products," Abenoja added.
Meanwhile, non-food inflation was also unchanged at 2.4 percent as downward adjustment in the prices of domestic petroleum products was offset by price increases in transport and education services.
The second quarter inflation figure brought the year-to-date average to 3.1 percent.
BSP Governor Nestor Espenilla Jr. said the year-to-date average is within the national government's announced target range of 3.0 percent +_ 1.0 percentage point fort the year.
"The second quarter headline inflation edges closer to midpoint of the target range," Espenilla said.
"The BSP survey of private sector economists for June 2017 showed that mean inflation forecasts for 2017 and 2018 were lower relative to the results in March 2017," Abenoja said.
"The mean inflation forecast for 2017 and 2018 declined to 3.3 percent and 3.4 percent, from 3.4 percent and 3.5 percent in March, respectively," he added.
The central bank official noted that respondents their lower inflation expectations for 2017 and 2018 to the slower increase in global oil prices due to the increased production of shale oil in the US; lower electricity rates in June 2017 which reflected Meralco's refund to customers; and lingering uncertainty over the prospects of the global economy.
"The risk to future inflation remained tilted toward the upside. The impact of the government's fiscal reform program and the pending petitions for adjustments in electricity rates are the main upside risk to inflation," Abenoja said.
"The uncertainty in the global economic landscape continues to be the main downside risk to inflation," Abenoja added.
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