April inflation is slowest in 13 months

NSO cites decline in fuel prices, higher farm output

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Inflation in April settled at its slowest pace in 13 months as the decline in fuel prices tempered the increase in the cost of other commodities and favorable farm output boosted the supply of some food products.

Consumer prices increased by an average 2.6 percent in April—the slowest since the 3 percent recorded in the same month last year—to bring down the average for the first four months of this year to 3 percent, the National Statistics Office reported Tuesday.

The latest four-month average stood at the bottom of the central bank’s official target range for the year of 3 to 5 percent.

According to Governor Amando Tetangco Jr. of the Bangko Sentral ng Pilipinas, price movements so far in the year gave comfort that, barring any unexpected developments, inflation would be modest at least over the short term.

“This turnout for the month was within the BSP’s forecast and confirms our outlook for manageable inflation over the policy horizon,” Tetangco said in a statement.

Data from the NSO showed that aided by the decline in fuel prices, the transport index contracted by 0.7 percent year-on-year in April to reverse the 0.5-percent annual increase in March. Similarly, prices of some food groups eased, among them farm oil and fats, which contracted by 7.9 percent in April from a 7.7-percent drop in March; and fish, which fell 0.5 percent in April from an annual increase of 1.2 percent the previous month.

Food products that registered year-on-year increases in prices were corn (from 1.6 percent in March to 0.1 percent in April); milk, cheese and egg (from 3.5 to 2.5 percent); fruits (from 4.5 to 4.2 percent), and sugar, jam, honey and chocolates (from 7.1 to 6.8 percent).

However, prices of rice and vegetables registered faster annual rates of increases. Rice prices rose 2.2 percent in April from 1.5 percent in March, while vegetable prices inched up by 1.7 percent in April from 1.4 percent the previous month.

Tetangco said the BSP would monitor domestic and external developments to see if there would be a need to adjust existing monetary policy to ensure inflation would stay within target.

He added that the central bank would assess the impact of the series of cuts in the yield on special deposit accounts (SDAs) as well as the latest developments in advanced economies to determine their impact on domestic inflation in the months ahead.

He said the BSP would work on helping keep inflation manageable and economic growth robust.

Since the start of the year, the BSP has cut the SDA rate three times for a total of 150 basis points to a historic low of 2 percent. The move was intended to encourage banks to withdraw some of their funds from the BSP’s SDA facility and use these for lending, which in turn, could cause economic activity to increase.

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  • delpillar

    at 2.8% average inflation rate per month, a 100-Peso commodity could be 139.25-Pesos after a year. This is still not good, assuming that my computation is correct.

    • sked482

      Naaah, I think this is a year on year comparison. 2.8% is comparing april 2013 with april last year. Quoting from the article above:

      “to bring down the average for the first four months of this year to 3 percent,”

      If this is a month-by-month increase then there is no sense getting the average, you would be more interested to see the total for the first four months.

      This means that for the first four months of this year prices are on average 3% higher compared to the first four months last year, that is, things that would cost 100 pesos first quarter of 2012 would now cost 103 pesos during the first quarter of 2013.

  • PerfectPoster

    I’m sick and tired of people complaining that they are not feeling the improvement at all. A friend of mine, a very good business leader told me; “our economy has been improving significantly since the new administration.. if you cannot feel the changes in the coming years, you have got to check your own self for problems.”

    Like many others has said, it will not come free. Economy is not a public miracle. It works best for those who seek and work hard for it. Kung u-upo lang tayo sa tabi tabi, at maghihintay ng biyaya.. how are we different from the so popular Juan Tamad? We are the 4th Generation of the legend. Sick.

  • http://www.facebook.com/jackson.tan.3538 Jackson Tan

    How will the effects of improved econometrics reach the rest of the people? It seems there are more people in poverty when we look at the street level.

    • http://twitter.com/erncastillo ern

      You must reach for it….. it will not come free.

      Even if sellers would lower their prices by 90 percent if you do not have money to buy, it really would not mean anything to you. So look for work or livelihood that is gainful…..and do not pester the investors and employers.

      This is just like your neighbor earning hefty profits…..what have you to benefit from it? Work for him or with him if you want to partake of his success.

    • Chrisnadal19

      coz they don’t have jobs or not looking any.. most likely tamad or waiting for dole outs. If others can do it, why not you?

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