Inflation dips to 8-month low of 2.8%

MANILA, Philippines - Consumer prices eased to 2.8 percent in November, the slowest since March this year due to sufficient supply of agriculture and fish products and lower domestic petroleum prices, the National Statistics Office (NSO) reported yesterday.

The  latest inflation rate  was the slowest since March’s 2.6 percent and was also down from the 4.7-percent rate recorded in  the same period last year. Inflation rate is the growth in the prices of  goods and services commonly purchased by households.

“The abundant supply of agriculture and fishery products in November 2012 resulted in greater annual reductions in the prices of various food items compared to the previous month,’’ National  Economic  and Development Authority (NEDA) officer-in-charge Rolando Tungpalan said.

Malacañang expressed elation over the decline in consumer prices, saying this would contribute significantly to the economy’s growth momentum.

“This comes at a time when the Philippine economy is growing at a strong 7.1 percent, contrary to the common notion that rapid economic growth is usually accompanied by inflationary  pressures,’’ Presidential Spokesman Edwin Lacierda said.

The November figure fell within the 2.7-percent to 3.6-percent forecast range by the Bangko Sentral ng Pilipinas (BSP), which yesterday said policy rates remained appropriate for the economy, ahead of its policy meeting next week.

Year-to-date inflation stayed at 3.2 percent, falling at the low-end of the BSP’s three to five-percent target for the year. It is also near the BSP’s outlook for the year of 3.3 percent.

 “This is an indication that inflation has remained under control... At this point in time, the stance of monetary policy is appropriate,” BSP Governor Amando Tetangco Jr. told reporters on the sidelines of a financial education summit in Makati.

To support growth, the central bank  cut its policy rates by a total of 100 basis points this year to a new record  low  of 3.5 percent for overnight borrowing and 5.5 percent for overnight lending.

The economy grew by 6.5 percent for the first three quarters, surpassing government targets.

 “The Philippines is in a good position of having achieved the ideal convergence of high economic growth and low inflation,” he added.

Consumer prices eased in November on the back of slower annual increments for food and non-alcoholic beverages, electricity, water, housing and oil, as well as transportation prices, the government statitics office said.

Compared with their October levels, price increases of food and non-alcoholic beverages slowed to 2.2 percent from 2.5 percent, utilities (to 3.8 percent from 4.5 percent) and transportation (to 1.3 percent from 1.7 percent).

Core inflation, which excludes volatile food and oil prices, likewise dipped to 3.4 percent from 3.6 percent.

On the flipside, prices of alcoholic beverages and tobacco went up faster at five percent from 4.8 percent, NSO said. The health and communication indices also recorded a slight uptick to 3.1 percent and 0.4 percent, respectively. – with Aurea Calica, Ted Torres