Inflation rise to 4.1 percent

According to the Institute for Development and Econometric Analysis, Inc. latest NewsBriefs, year-on-year headline inflation was at 4.1 percent last April, up from the 3.9 percent recorded last March and higher than the 2.6 percent recorded in April last year. Core inflation, meanwhile, was at 2.9 percent, higher than the 2.8 percent posted in the previous month. This, however, was smaller in comparison to the 3 percent inflation during the same period last year.

The increase in annual inflation was driven by the increase in prices of different major commodities. Food and non-alcoholic beverages index advanced to 6.2 percent last month; housing, water, electricity, gas and other fuels index was at 3.0 percent, while the transport index rose to 1.3 percent. The rice index, which is part of the food index, increased by 13.5 percent on a yearly basis, driving much of the increase in the prices of food and alcoholic beverages.

Considering inflation by region, the National Capital Region and the Areas Outside NCR  both experiences gains in prices. Annual inflation for NCR was at 3.3 percent, up from the 2.9 percent recorded in March this year. In AONCR, inflation also rose from 4.2 percent last March to 4.3 percent.

Likewise, per same published report, according to the Bureau of Treasury, state borrowings amounted to PhP34.651 billion last March, down by 25.64 percent from the PhP46.345 billion. From this, domestic borrowings declined by 60.55 percent to PhP17.88 billion from PhP45.319 billion recorded in the same period last year. About PhP400 million were sourced from Treasury bills while PhP16.581 billion came from external borrowings. This brought total borrowings for the first quarter to PhP86.594 billion, 31.38 percent lower than the PhP126.189 billion. Officials expect that gross borrowings will be at PhP730.03 billion.

Furthermore, the International Monetary Fund  estimated that growth will slow down in the first quarter. Currently, the IMF estimates that growth will be around 6.25 percent to 6.5 percent, largely driven by government fiscal spending for reconstruction in the areas hit by Typhoon Yolanda. Moreover, a steady but non-accelerating remittances and retail sales, and the slow recovery of exports are also possible causes of the slowdown.

Also, according to central bank data, gross international reserves fell to USD79.61 billion in April from USD79.65 billion recorded in the previous month and USD83.21 billion recorded in the same period last year. Officials attributed the decline to continuous outflows of foreign currency due to maturing obligations of the National Government. Moreover, operations of the BSP also affected the decline. Outflows, however, were countered by foreign currency deposits of the Treasury from loans coming from multinational sources. The central banks estimates that reserves will be at USD88 billion this year.

Lastly, consumers will face lower oil prices this week as oil firms start their roll backs. Petron and Shell will impose a decline of PhP0.75, PhP0.50, and PhP0.50 per liter of gasoline, diesel, and kerosene, respectively. PTT Philippines will follow with a rollback of PhP0.75/L of gasoline and PhP0.50/L of diesel. The decline in the prices was largely influenced by the movement of oil prices in the world market, according to the researchers of according to IDEA.

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