Inflation eases in November

MANILA, Philippines — Inflation slowed down for the first time in five months in November as impact of high fuel and transport costs was cushioned by cooled down prices of food, and alcoholic beverages and tobacco.

According to latest data from the Philippine Statistics Authority, the country’s headline inflation decelerated to 3.3 percent in November from October’s 3.5 percent, but faster than the 2.5 percent from a year ago.

It was within the Bangko Sentral ng Pilipinas’ 2.9 to 3.6 percent estimate for the month.

Excluding selected food and energy items, core inflation, however, quickened to 3.3 percent last month, picking up from October’s 3.2 percent and higher than the 2.4 percent in the November 2016 reading.

Sought for comment, Guian Angelo Dumalagan, market economist at the Land Bank of the Philippines, said “the appreciation of the peso and better weather conditions in the country resulted in a slower increase in the prices of food, beverages and tobacco.”

“In particular, there was a marked slowdown in the prices of fruits and vegetables, with the latter showing a decline in cost from previous year's level,” Dumalagan explained in an e-mail interview.

“The softening in domestic inflation was tempered by higher oil prices, which contributed to higher upticks in the costs of transport, fuel, and electricity,” he added.

“For this year, inflation might settle at 3.2%, on average, with next year's inflation likely to come in higher at 3.4%, driven by higher oil prices and possibly stronger consumer demand amid an uptick in government spending. While the peso might remain weak overall, it could strengthen slightly next year, tempering the increase in consumer prices.”