MANILA – Cutbacks in the prices of food, electricity, and fuel brought headline inflation down to 2.2 percent in April 2015 from 2.4 percent in the previous month and from 4.1 percent in April 2014, according to the National Economic and Development Authority (NEDA).

“Low and stable inflation in January to April 2015, which averaged at 2.3 percent, bodes well for consumption growth. It is also within the Development Budget Coordination Committee’s inflation target range of 2.0 to 4.0 percent,” said NEDA Officer in Charge (OIC) and Deputy Director-General Emmanuel F. Esguerra.

The Philippine Statistics Authority reported that moderate inflation in the food subgroup (4.0% from 4.4%) lingered in April 2015, pulling down headline inflation. The slowdown in food inflation can be attributed to slower price adjustments in rice, meat, and fruits.

Non-food inflation also slackened in April 2015 following continued rollbacks in electricity, gas, and other fuels. Rollback in domestic petroleum prices continued following the sharp decline in international oil prices since the last quarter of 2014.

Meanwhile, core inflation, which excludes selected volatile food and energy prices, also fell to 2.5 percent from 2.7 percent in March 2015 and 2.9 percent in April 2014. Core inflation in the first four months of 2015 averaged at 2.5 percent.

Inflation in the National Capital Region (NCR) moderated to 1.5 percent in April 2015 from 1.9 percent in March 2015 and 3.3 percent in the same period a year ago. This is accounted for by slower inflation in several major commodity groups including food and non-alcoholic beverages. Outside NCR, inflation slid to 2.3 percent in April 2015 from 2.6 percent in March 2015 and 4.4 percent in April 2014.

“The peso is expected to remain relatively stable given the country’s strong external position owing to strong remittances and foreign direct investment inflows, ample international reserves, and a manageable level of external debt. Overall, these conditions are seen to contribute to stable domestic prices going forward,” the NEDA official said.

But Esguerra noted potential risks to inflation such as the current episode of mild El Niño in the country, should its adverse effects intensify.

“Regular monitoring of drought incidence in agricultural areas should be continued to ensure that appropriate policy actions are implemented without delay. Timely importation of rice to augment domestic supply should serve as a ready measure to prevent the repeat of the high rice prices witnessed in the third quarter of 2013 until 2014,” he said.

Esguerra also emphasized that it is likewise critical for the government to continue to explore a more lasting solution to further decongest Metro Manila and avoid future disruptions in the domestic supply chain. He also stressed the need to promote productivity increases in agriculture and the food processing industries.

“There should be programs to cover the use of appropriate technology to expand production capacity as well as intensification of credit programs and facilities with crop insurance,” he said.

Esguerra is OIC of NEDA while Economic Planning Secretary Arsenio M. Balisacan is on official business abroad from May 5-10, 2015.