Wednesday, December 5, 2012

November’s 2.8% inflation lowest in last 5 months


The abundant supply of some food products caused the average increase in the prices of goods and services in the country to ease further to 2.8 percent in November, putting the year-to-date inflation rate at 3.2 percent.
The November inflation rate was the lowest in the last five months and was way below the year-ago inflation of 4.7 percent.
“It resulted from the deceleration in the annual growths posted in the indices of food and non-alcoholic beverages; housing, water, electricity, gas and other fuels; and transport. Excluding [select] food and energy items, core inflation was pegged at 3.4 percent in November, slower compared to the 3.6-percent growth in October,” the National Statistics Office (NSO) reported on Wednesday.
Rolando G. Tungpalan, officer in charge of the National Economic and Development Authority (Neda), said also on Wednesday that the abundant supply of agriculture and fishery products in November 2012 resulted in greater annual reductions in the prices of various food items compared to the previous month.
Slower increase in prices was observed in major food items such as fish (5.9 percent in November 2012 from 6.0 percent in October 2012), milk, cheese and eggs (3.3 percent from 3.4 percent), and fruits (4.9 percent from 5.2 percent). This was also coupled with the decline in prices of vegetables (-5.3 percent from -0.1 percent) and oils and fats (-4.9 percent from -4.5 percent).
“Slower increases of prices in electricity, gas and other fuels were also observed in November 2012 [3.1 percent from 4.9 percent last year] due to the contraction in Manila Electric Co.’s [Meralco] generation charge and the lower prices of kerosene and diesel,” Tungpalan said.
Citing industry sources, he added that Meralco’s generation charge in November 2012 was lower by 2.7 percent (P0.16 per kilowatt-hour) against the same period in 2011 due to lower generation costs from suppliers.
The prices of kerosene also slowed down, falling by 2.5 percent in November 2012 from an increase of 3.5 percent in October 2012.  Furthermore, diesel prices fell by 4.6 percent from 3.1 percent.
Tungpalan said the average inflation from January to November 2012 remains within the Development Budget Coordinating Committee’s target range of 3.0 percent to 5.0 percent for 2012.
He added that the lower core inflation, which excludes food and energy items, 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,” Tungpalan said.
Inflation is the rate of increase in prices of goods and services commonly purchased by households, as measured by the Consumer Price Index (CPI).  On the other hand, core inflation represents a more long-term inflation trend, as it excludes certain items that have short-term and volatile price movements.
The NSO said prices of goods and services in Metro Manila (National Capital Region, or NCR)  only increased by 2.6 percent in November compared to 2.9 percent in October, while inflation in areas outside of NCR settled to 2.9 percent from 3.3 percent in October.
Malacañang is “pleased” with the country’s 2.8-percent inflation rate in November, from 3.1 percent in October, which it obtained even with higher economic growth, Palace Spokesman Edwin Lacierda said on Wednesday.
“We are pleased with the announcement that inflation for the month of November had slowed down to 2.8 percent….This comes at a time when the Philippine economy is growing at a strong 7.1 percent, contrary to the common notion that rapid economic growth is usually accompanied by inflationary pressures,” Lacierda said.
(Mia M. Gonzalez)

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