Inflation in November dipped to its lowest in five straight months due to an ample supply of agricultural products and cheaper local oil prices.
The National Statistics Office (NSO) reported Wednesday that the year-on-year inflation last month, as measured by the consumer price index, slowed to 2.8 percent from 3.1 percent in October.
The latest inflation figure did not surprise economists as earlier projections had been made on the sustained downtrend in inflation before the year ends due to stable food prices and a stronger peso. The figure was also at the lower end of the 2.7-3.6 percent target range of the Bangko Sentral ng Pilipinas for the month.
The lowest since July, the November inflation rate was a marked improvement from the year-ago rate of 4.7 percent. The NSO recorded the lowest year-on-year inflation last March at 2.6 percent.
“The country’s annual [increase] in the food index was pegged at 2.1 percent in November. This was slower than the 2.5-percent growth in October,” the NSO said.
Core inflation, which represents long-term inflation trend, stood at 3.4 percent in November, slower compared to the 3.6 percent in October. The lower core inflation implies an easing of demand pressures on consumer prices.
“With the continued benign price increases for the period, we are expecting that inflation should be manageable for the rest of the year,” National Economic Development Authority officer-in-charge Rolando Tungpalan said in a statement.
According to the NSO, the decline in the year-on-year inflation was helped by the slower price gains in heavily weighted food, non-alcoholic beverages, electricity and fuel.
Citing industry data, Tungpalan noted that Manila Electric Co.’s generation charge last November was lower by 2.7 percent (P0.16/kWh) against the same period in 2011 due to lower generation costs from suppliers.
He also said the prices of kerosene, which slowed down, fell by 2.5 percent in November from an increase of 3.5 percent in October. Diesel prices likewise eased by 4.6 percent from 3.1 percent.
“These were due to the trimmed trading price of Dubai crude in the international market, which contracted by 1.6 percent from a 4.8 percent growth in October 2012,” Tungpalan said.
In Metro Manila, the year-on-year inflation also eased to 2.6 percent in November from 2.9 percent in October as the NSO recorded lower year-on-year price increases in food and non-alcoholic beverages (1.6 percent); housing, water, electricity, gas and other fuels (2.5 percent) and restaurant and miscellaneous goods (3.6 percent).
The annual inflation in areas outside Metro Manila likewise moved at a slower pace, settling at 2.9 percent in November from 3.3 percent in October.
“This is consistent with my earlier prediction that full-year inflation would be in the neighborhood of 3.2 percent, approaching the lower end of the official inflation forecast,” said economist Benjamin Diokno of the UP School of Economics.
The mild rise in prices is caused by a strong peso and “not good governance as Malacañang would like to claim,” added the former budget secretary.