MANILA (Mabuhay) – Headline inflation in the Philippines rose to 4.5 percent in May, from 4.1 percent in April and 2.6 percent a year earlier, driven by higher prices of food and non-alcoholic beverages, the National Statistics Office reported Thursday.
“Faster annual increments were also registered in the indices of clothing and footwear; housing, water, electricity, gas and other fuels; furnishing, household equipment and routine maintenance of the house; transport; and communication,” the report read.
“Excluding selected food and energy items, core inflation escalated 3.1 percent in May 2014, faster than the 2.9 percent growth in April 2014 and 3.0 percent in the same month last year,” NSO added.
In a separate statement, the National Economic and Development Authority (NEDA) said headline inflation for 2014 will stay within government’s target of 3.0 to 5.0 percent – “in the absence of major economic shocks.”
“However, the balance of risks to the inflation outlook remains slightly tilted toward the upside,” Economic Planning Secretary Arsenio M. Balisacan said in the same statement.
“Potential increases in food prices may emanate from weather disturbances such as the possibility of an imminent El Niño, the depreciating peso, and the pending petitions for further adjustments in utility rates, transport fares, and wages,” he added.
In the Nation Capital Region, which encompasses Metro Manila and nearby provinces, the yearly inflation rose 3.8 percent, from 3.3 percent and 1.8 percent, according to NSO.
Various prices indices that include food and non-alcoholic beverages, clothing and footwear, as well as housing, water, electricity, gas and other fuels, and health were responsible for faster inflation in the capital region.
In the countryside, the annual inflation was recorded at 4.7 percent, compared with 4.4 percent in April. Six out of 11 commodity divisions registered higher annual rates in the provinces.
Within govt target
NEDA noted the average headline inflation rate in the first four months settled at 4.1 percent, saying it was “still within the Development Budget Coordination Committee’s inflation target of 3.0 to 5.0 percent for 2014.”
Almost all major food items registered higher year-on-year price increases, lifting the food subgroup to 7.1 percent in May from 6.5 percent in April. “These include rice, meat, fish, milk, cheese and eggs, oils and fats, fruits, vegetable, sugar, and other food products,” according to NEDA.
“Rice prices continue to hover at high levels as supply tightness persists in the market. For corn, the high inflation rate may be attributed to lower production in some regions, particularly in CALABARZON and Eastern Visayas, as a result of dry spell and rat infestation,” said Balisacan, who is also NEDA director-general.
A strong domestic demand for sugar lifted prices of the commodity, while the higher prices of other food products in the domestic market were mainly a reflection of price movements in the international market, Balisacan added. (MNS)