Oct. inflation eased to 3.1% from 3.6% in September

Published on Tuesday, 06 November 2012 20:21

Written by Max V. de Leon

THE average increase in the prices of goods and services in the country slowed to its four-month low of 3.1 percent in October, putting the country’s inflation rate for the first three quarters at 3.2 percent.

The National Statistics Office (NSO) said the deceleration in the annual increases recorded in the heavily weighted food and non-alcoholic beverages index and recreation and culture index was the main reason in the easing of the October headline inflation rate.

“The increase in the heavily weighted food and non-alcoholic beverages index in the Philippines moved slower to 2.5 percent in October from 3.6 percent in September and recreation and culture index, 2.6 percent from 2.7 percent. The rest of the commodity groups retained their last month’s rate except in furnishing, household equipment and routine maintenance of the house index whose annual adjustment went up to 4.8 percent from 4.6 percent,” NSO said.

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The food index alone at the national level decelerated to 2.5 percent in October from 3.6 percent in September.

Not counting the selected food and energy items, core inflation slid to 3.6 percent in October from 3.8 percent in September.

The 3.1-percent headline inflation rate in October is the lowest in four months. The rate of increase in the prices of goods and services was 3.2 percent in July, 3.8 percent in August and 3.6 percent in September. In October 2011 headline inflation rate was at 5.2 percent.

Malacañang noted that among Southeast Asian nations that have reported their inflation rates thus far, the Philippines registered the lowest inflation for October compared to Vietnam’s 7 percent, Indonesia’s 4.6 percent and Thailand’s 3.32 percent.

“October’s inflation rate is well within the range of 3 percent to 5 percent as set in the Philippine Development Plan for 2011-2016 and comes at the heels of upbeat consumer confidence and another all-time high in the Philippine Stock Exchange Index. The Aquino administration has consistently pursued equitable and inclusive economic growth. Ensuring a manageable inflation rate is part of this effort,” Malacañang said in a statement.

The NSO said prices of consumer items continued to post a negative monthly rate of -0.1 percent in October.

“In general, price declines were observed in the heavily weighted food items, particularly rice and vegetables. Reductions in the prices of selected food items such as fish, cooking oil and some condiments and seasonings along with lower charges in electricity rates and the price decreases in gasoline and diesel in many regions also contributed to the downtrend,” it said.

The annual inflation in Metro Manila eased to 2.9 percent in October from 3.5 percent in September, while the areas outside of Metro Manila also recorded an improvement to 3.3 percent in October from 3.7 percent in September with 10 regions showing slower annual rates.

The biggest slowdown of 1.5 percentage points was posted in Cagayan Valley (2.7 percent from 4.2 percent). The lowest annual rate was posted in Ilocos at 1.5 percent, while the highest at 7.2 percent remained in Central Visayas.

Major food items that experienced slower increases in their prices include oils and fats (-4.5 percent in October 2012 from -4.9 percent in September 2012), vegetables (-0.1 percent from 9.9 percent), fruit (5.2 percent from 6.2 percent), fish (6.0 percent from revised rate of 6.9 percent), and bread and cereals (2.1 percent from 2.3 percent).

“The continued benign inflation for the period suggests an easing of demand pressures on consumer prices. This should be able to contain inflation for the rest of the year,” Dr. Rosemarie G. Edillon of Neda’s National Planning and Policy Staff said.

Slower annual increases were also recorded in the price indices of electricity, gas and other fuels (4.9 percent from 5.0 percent) and transport services (1.4 percent from 1.5 percent).

Also, lower annual gains in the prices of unleaded gasoline (ULG) (0.3 percent in October 2012 from 0.7 percent in September 2012, kerosene (3.5 percent from 5.7 percent), and diesel (3.1 percent from 5.6 percent) were registered even though higher electricity charges in October 2012 along with higher price adjustments for liquefied petroleum gas (LPG).

“These lower price increments caused housing, water, electricity, gas and other fuels and transport costs to rise at a steady pace of 4.5 percent and 1.7 percent, respectively,” said Edillon.