Inflation rose to 1.6 percent in May, matching the rate a year ago although faster than a month ago on higher prices of food and clothing amid the election season.
The rate of increase in prices of basic goods last month matched the 1.6 percent recorded in May last year but was higher than April 2016’s 1.1 percent, a Philippine Statistics Authority report released Tuesday showed.
The May inflation was below the government’s target range of 2-4 percent. Inflation has also remained below 2 percent since the 2.2 percent registered in April last year.
“The increase in inflation can be attributed to higher demand due to election spending and partly to supply constraints in agriculture because of the residual effects of the weakening El Niño,” Economic Planning Secretary Emmanuel F. Esguerra said in a statement.
In a text message to reporters, Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said upticks in the beverages, clothing and food indices pushed inflation faster.
Tetangco nonetheless noted that it was “within our forecast of 1.1-1.9 percent and is consistent with our assessment that inflation will slowly rise to within the national government’s target range of 2-4 percent over the policy horizon.”
“The manageable inflation rate for the first five months of 2016 is expected to continue for the rest of the year as the productive capacity of the domestic economy expands and oil prices remain low,” said Esguerra, who is also the director-general of the National Economic and Development Authority (Neda).
“The stability in inflation rate will create a positive environment for investments and ensure affordability of basic commodities for the poor,” he added.
According to Tetangco, monetary authorities “will continue to monitor external developments, including next US Federal Reserve moves, and domestic developments such as changes in pump prices and utility rates, to see if there is any need to adjust policy stance.”