Full-year 2015 inflation lowest since 1986

THE PRICES of basic goods and services rose at their fastest pace in seven months last December, but at a rate that allowed the year 2015 to post the lowest full-year inflation of 1.4 percent in nearly three decades.

The Philippine Statistics Authority (PSA) reported Tuesday that headline inflation in December picked up to 1.5 percent, higher than the 1.1 percent posted last November but slower than the 2.7 percent a year ago.

Inflation bottomed out in November following the record lows of 0.4 percent during the months of September and October. The December figure was the highest since May’s 1.6 percent.

For the entire 2015, the annual average headline inflation of 1.4 percent was not only lower than 2014’s 4.1 percent but also the lowest since 1986, Bangko Sentral ng Pilipinas (BSP) data showed.

Inflation stood at 1 percent in 1986 and went upwards since, BSP data based on year 2000 prices showed. As for data based on 2006 prices, which the government uses at present, the 2015 figure was also the slowest since the adjusted 1995 figure.

In a text message to reporters, BSP Governor Amando M. Tetangco Jr. noted that “as we expected, [the actual inflation rate] is below the government’s target for 2015” of 2-4 percent. “But our forecasts for 2016-2017 show an inflation path consistent with the national government target of 2-4 percent.”

In the next two years, Tetangco said the risks to inflation “remain the same, including uneven global growth prospects, oil prices still seen to stay low (on the downside) and a harsher El Niño (on the upside).”