PHL Inflation Up in November

Higher prices of both food and non-food items pushed the country’s inflation rate to 1.1 percent in November from 0.4 percent in the previous month.

Last month’s figure brought the year-to-date headline inflation to 1.4 percent, below the target range of 2 to 4 percent set by monetary authorities for 2015.

Inflation for the food subgroup rose on the back of higher prices of meat, fish, vegetables and corn, which offset the slowdown in prices of heavily-weighted items such as rice, milk, cheese, eggs and non-alcoholic beverages.

“Higher local demand and the lingering effects of typhoon Lando accounted for the price increases in meat and vegetables, while ample supply sustained the lower price of rice,” said National Economic and Development Authority (NEDA) Deputy Director-General Rolando Tungpalan in a statement.

Inflation in non-food items was also observed due to slower decline in the costs of housing, water, electricity, gas, and other fuels.

Prices in electricity, gas and other fuels went up on the back of higher generation and transmission charges in November 2015.

Despite the persistent downward movement of global oil prices, local prices of gasoline and liquefied petroleum gas increased, while prices of diesel and kerosene remained relatively low.

“Despite the uptick in November, average inflation will likely settle below the low-end target for the year. This will largely be influenced by the slump in global petroleum prices, along with other favorable supply-side factors such as the sluggish domestic retail prices of corn, oil and rice,” said Tungpalan.

To manage risks of higher inflation, the NEDA official called for the faster implementation of the Roadmap for Addressing the Impact of El Niño (RAIN) to soften its adverse impact on food prices and utility rates.

“The government should err on the high side in determining food import requirements in anticipation of El Niño to avoid food price spikes, which would be very detrimental to the poor who spend over 60 percent of their budget on food,” he said.

Tungpalan also pointed out the unstable energy situation in Mindanao given its large dependence on hydropower plants.

“There is a need to reinforce measures to expand investments in the rehabilitation program for existing hydropower plants so as to increase their generation capacities,” he said. (PNA) JMC/LDV