Inflation dips to lowest level in 20 years — NEDA

By Leslie D. Venzon

MANILA, June 5 (PNA) — Philippine inflation rate fell to its lowest level in 20 years, dragged by ample supply of key food items and lower electricity and fuel prices.

The Philippine Statistics Authority reported that headline inflation rate eased further from 2.2 percent in April to 1.6 percent in May.

Last month’s figure brought five-month average to 2.2 percent, well within the government’s two to four-percent target for 2015.

“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,” said National Economic and Development Authority (NEDA) officer-in-charge and Deputy Director-General Rolando G. Tungpalan.

Tungpalan assured that overall policies remain supportive of a manageable rate of inflation.

“With the country’s strong external position, the peso is expected to remain relatively stable and this will contribute to stable domestic prices going forward,” he said.

But despite the low inflation figures, the government remains wary of possible inflation risks.

“With the report that El Niño in the country may likely continue until early 2016, 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,” said Tungpalan.

The PSA reported that inflation in the food subgroup eased in May 2015 to 3.2 percent from four percent following slower price adjustments in rice, meat, fish and fruits.

Non-food inflation also moderated in May 2015 to 0.3 percent from 0.8 percent resulting from the sustained decline in the prices of electricity, gas and other fuels.

Meanwhile, core inflation, which excludes selected volatile food and energy prices, slid further to 2.2 percent last month from 2.5 percent in April 2015.

The slowdown of inflation in May 2015 appeared to be geographically broad-based as the price index in the National Capital Region (NCR) slid to 0.7 percent from 1.5 percent.

All regions except Region X (Northern Mindanao) posted slower year-on-year price increases, resulting in a tempered overall inflation for areas outside NCR to 1.8 percent in May from 2.3 percent the previous month. (PNA)