ASEAN KEY DESTINATIONS
PHL May inflation dips to 1.6%, its lowest since 1995
Prices of goods and services in the Philippines rose at the slowest levels last months due to declines in the costs of housing, utilities, fuels and communication, the Philippine Statistics Authority revealed on Friday.
The headline inflation moved at a slower pace of 1.6 percent in May, from 2.2 percent in April and 4.5 percent in May 2014.
"That is indeed the lowest ever... and considering other variables, should be lauded by the market," Grace Cerdenia, research head at 2Tradeasia, told GMA News Online.
This should spur consumer-related plays in the market, she added.
“Using the current base year 2006, the May 2015 inflation rate is the lowest, covering the monthly inflation series from 1995 to May 2015. It was also below the market expectation of 2.0 percent,” said Rolando G. Tungpalan, National Economic and Development Authority (NEDA) OIC and deputy director-general.
"The slowdown was mainly brought about by the annual declines still posted in the indices of housing, water, electricity, gas and other fuels and communication," the PSA noted in a monthly report on the Consumer Price Index.
"Lower annual increments in the indices of food and non-alcoholic beverages; alcoholic beverages and tobacco; clothing and footwear; and furnishing, household equipment and routine maintenance of the house also contributed to the downtrend," the state-run PSA said.
Core inflation, El Niño
Core inflation, which excludes selected volatile food and energy prices, slid further to 2.2 percent from 2.5 percent in April 2015 and 3.1 percent in May 2014. Core inflation in the first five months of 2015 averaged at 2.5 percent, according to NEDA
“Rice prices have normalized, as total rice stocks inventory grew by 16.5 percent year-on-year as of April 2015. With favorable weather conditions, the supply of fish has been steady and sufficient and the volume of in-season fruits in the market stable,” Tungpalan said.
“Inflation in the meat index was also curbed, following the Department of Trade and Industry’s imposition of lower suggested retail price,” the NEDA official added.
NEDA pointed out the slowdown of inflation last month appears to geographically broad-based, citing the price index in the National Capital Region slipped to 0.7 percent – from 1.5 percent in April and 3.8 percent a year earlier.
All regions, except Region X or Northern Mindanao, registered slower year-on-year price increases, resulting in a tempered inflation of 1.8 percent for areas outside NCR, from 2.3 percent in April 2015 and 4.7 percent in May 2014.
“Inflation remained low and stable in the first five months of 2015 in line with expectations over the policy horizon. This bodes well for household consumption,” Tungpalan said.
Despite the low inflation figures, the government remains wary of possible inflation risks.
The report that El Niño may likely continue until early 2016, Tungpalad said "... we should be keen in monitoring drought in agricultural areas and be ready to assist our farmers should there be a need to shift to crops that are less dependent on water and at the same time resilient to the high temperature climate.”
In a separate statement, Bengko Sentral Governor Amando Tetangco Jr. said "... the actual inflation in May continue to affirm the BSP's assessment of a manageable inflation outlook over the policy horizon."
"Looking ahead, the BSP will remain vigilant in monitoring price and output conditions to ensure price stability conducive to a balanced and sustainable economic growht." he added.
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