MANILA, Philippines – The increase in prices of basic goods and services in the country slowed in January as costs of food items remained stable, the National Economic and Development Authority (NEDA) said yesterday.
In a report, Economic Planning Secretary and NEDA chief Emmanuel Esguerra said inflation – the measure of how fast prices in the choice basket of goods and services are moving within a certain period – eased to 1.3 percent in January from 1.5 percent in December 2015 and 2.4 percent a year earlier.
He said inflation for the food subgroup – which account for more than a third of the basket – slowed as prices of fish, fruits, vegetables, milk, cheese, and eggs became stable.
“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,” Esguerra added.
The January inflation rate fell within the Bangko Sentral ng Pilipinas target of 0.8-1.6 percent for the period, and exactly in line with market consensus.
Inflation in non-food items also slowed down across all commodity groups, especially in transport.
Domestic prices of petrol, including gasoline, liquefied petroleum gas, diesel, and gasoline, continued to go down.
Esguerra said the low fuel prices was due mainly to persistent global oversupply and record stockpile of crude oil, which weakened prices of Dubai oil, Brent, and West Texas Intermediate (WTI).
Price reduction in electricity, gas and other fuels also continued on account of lower generation cost, although at a slower pace than in December 2015, due to increased transmission charges.
Core inflation, which excludes volatile prices of energy and food, likewise eased to 1.8 percent in January 2016 from 2.1 percent the previous month.
Nonetheless, risk of higher food prices remain in the first semester due to the negative effects of El Nino and the onset of the summer season.
The NEDA chief added it was critical to set accurate determination of food import requirements to avoid supply disruptions to keep inflation stable in the coming months.
From a global perspective, Esguerra said the government must prepare for potential negative impacts on the economies of oil-producing countries, given the expectation of a 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. The government should actively extend assistance to displaced workers, including re-training, livelihood, re-integration or placement services,” he said. – With Lawrence Agcaoili