Inflation eases to 1.3% in January

MANILA, Philippines - Inflation went down to 1.3 percent in January from 1.5 percent in December 2015, the National Economic and Developement Authority (NEDA) reported on Friday.

According to NEDA, slower price adjustments in food and non-food items pulled down inflation.

Prices of fish, fruits, vegetables, milk, cheese and eggs became stable which slowed down the inflation for the food subgroup.

"Good weather conditions at the onset of 2016 allowed prices of these food items to stabilize. This was an improvement from the previous month when Typhoon Nona pushed up prices due to hampered production, transport, and delivery of agricultural products in the affected areas," Socioeconomic Planning Secretary and NEDA Director General Emmanuel Esguerra said in a statement.

The inflation rate this month falls within the 0.8 to 1.6 percent forecast of the Bangko Sentral ng Pilipinas for this period. It is lower that the 2.4 percent inflation rate in January 2015.

Meanwhile, inflation in the non-food items slowed down in all commodity groups.

"Domestic prices of petrol – gasoline, liquefied petroleum gas, diesel, and gasoline – continued to go down. This was still due to persistent global oversupply and record stockpile of crude oil which weakened prices of Dubai oil, Brent and West Texas Intermediate," Esguerra said.

Prices of electricity, gas and other fuels also slowed down due to lower generation cost.

Core inflation also dropped from 2.1 percent the previous month to 1.8 percent in January.

READ: December inflation rises to 1.5%

Esguerra, however, warned that the risk of higher food prices will remain for the first few months of the year.

"While it is noted that El Niño will gradually weaken beginning next month, the onset of the summer season may constrain farm output," the NEDA chief said.

The NEDA official said that the there is a need for the government to prepare for potential negative impacts on economies of oil-producing countries as there is an expected prolonged period of low oil prices.

"Such developments could adversely affect overseas Filipino workers as the governments of the said economies implement austerity measures, cut back on subsidies, postpone infrastructure outlays, and raise taxes," Esguerra said.

Esguerra added that the government should extend assistance to displaced workers such as training, livelihood, re-integration or placement services.