Philippines records lowest inflation in 2 decades
MANILA, Philippines – The country’s inflation rate continued to plunge further from 1.6 percent in May to a record low of 1.2 percent in June this year, the National Economic and Development Authority (NEDA) announced on Tuesday.
The NEDA said sufficient supply of food and moderate price pressures in energy and oil rates pulled down the inflation to its new lowest level in two decades. Inflation a year ago was at 4.4 percent.
“The June 2015 inflation rate is now the lowest, covering the monthly inflation series from 1995 to June 2015 using the current base year 2006. The figure was also below the market expectation of 1.5 percent and very well within the inflation target range of 2 to 4 percent set by the government for 2015,” NEDA Officer in Charge and Deputy Director-General Emmanuel Esguerra said in a statement.
Slower price adjustments in rice, meat, vegetables and fruits eased the inflation in the food subgroup from 3.2 percent to 2.1 percent.
Meanwhile, inflation partially increased in non-food commodities to 0.4 percent in June from 0.3 percent in May.
“The double-digit year-on-year decline in the prices of unleaded gasoline, diesel, kerosene, liquefied petroleum gas or LPG, and the decline in Meralco rates affected key oil and electricity-related commodities and services in the current month,” the NEDA official added.
Core inflation, which excludes selected volatile food and energy prices, slid from 2 percent in May to 2 percent in June. Core inflation averaged at 2.3 percent for the first half of 2015.
“The slackening of the core inflation provides less pressure for interest rates to increase, and this bodes well for household consumption and further supports economic expansion moving forward,” Esguerra said.
The NEDA noted that the decline of inflation seems to be geographically based as the price index in the National Capital Region (NCR) dropped while all regions except the Cordillera Administrative Region (CAR) recorded slower year-on-year inflation.
NCR recorded a drop from 0.7 percent in May to 0.6 percent in June while all regions except CAR registered a decline of 1.8 percent in May to 1.4 percent in June.
“It is also worth noting that except for the Philippines, inflation in the ASEAN-5, which includes Indonesia, Malaysia, Singapore, and Thailand, generally posted upward adjustments in May and June 2015,” Esguerra added.
The NEDA official stressed that the government will remain cautious in any upside inflation ris such as the occurrence of typhoons for the rest of the year.
Edwardo Miguel Guevarra Roldan
Isang Samahan, Isang Pilipinas (ISIP) and Think Philippines!
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