Inflation seen further slowing to 1.2% in Jan.

Inflation likely slowed to 1.2 percent in January as prices normalized after the Christmas season, the Department of Finance’s (DOF) chief economist said.

In an economic bulletin, Finance Undersecretary Gil S. Beltran said the rate of increase in the prices of basic commodities this month was seen lower than the 1.5 percent posted in December and the 2.4 percent recorded in January last year.

The government will announce the actual inflation figure for January next week.

Beltran noted that “food prices normalized, fuel prices continued to fall, and electricity rate reached a five-year low” in the first month of 2016.

Specifically, the power rate charged by Manila Electric Co. dropped by 13 percent year-on-year and 2 percent month-on-month to P8.72 per kilowatt hour mainly due to the continuous decline in generation charges, Beltran added.

Data compiled by the DOF showed that inflation for food and non-alcoholic beverages, clothing and footwear, as well as transport slid from month-ago and year-ago levels.

The Finance official expects the low inflation environment to persist in the near term.

“The period of benign inflation is extended due to low fuel prices. This will enable the country to grow faster and investments to continue rising to take advantage of the similarly benign interest rate environment despite the Fed liftoff and volatile financial markets,” Beltran explained.

He also sees the upcoming national elections in May as a growth driver this year.

“Investors can take advantage of the spike in consumer demand that usually accompanies the election season,” he said.

The Bangko Sentral ng Pilipinas had projected inflation to “rise moderately”—although settling within the 2 to 4 percent target range—in 2016 from the almost three-decade low of 1.4 percent posted last year.