MANILA – Slower price adjustments in food, energy, and oil pushed inflation to its new lowest level in 20 years, according to the National Economic and Development Authority (NEDA).
The Philippine Statistics Authority reported today that headline inflation rate plummeted further to 0.8 percent in July 2015 from 1.2 percent in the previous month and 4.9 percent in July 2014.
“Inflation remained low and stable in the first semester of 2015 while year-to-date headline inflation lodged below the inflation target range of 2.0 to 4.0 percent set by the government for 2015. In fact, using the current base year 2006, the July 2015 inflation rate is a new record low, covering the monthly inflation series from 1995 to June 2015,” said Economic Planning Secretary Arsenio M. Balisacan.
Headline inflation in the food subgroup eased further in July 2015 (1.3% from 2.1% in June), following moderate price pressures in bread and cereals, fish, vegetables, and fruits.
“In part, the increase in total rice stocks inventory, which grew by 30.9 percent year-on-year as of June 2015, supported the normalization of rice prices from double-digit annual growths recorded in 2014,” the Cabinet official said.
“Stable bread prices also benefitted from the low global wheat prices while meat prices remained stable,” added Balisacan, who is also NEDA Director-General.
Non-food inflation also reflected stable price movements in July 2015 following continued rollbacks in the prices of electricity, gas, and other fuels.
Meanwhile, core inflation, which excludes selected volatile food and energy prices, slid further to 1.9 percent from 2.0 percent in June 2015 and 3.0 percent in July 2014. Core inflation in the first seven months of 2015 averaged at 2.3 percent.
“The easing of the core inflation is favorable for household consumption and supports economic expansion moving forward, as it provides less pressure for interest rates to increase,” he said.
On the other hand, inflation in the National Capital Region accelerated due to slight increases in the prevailing prices of basic necessities and prime commodities. In contrast, all regions, except the Davao Region (Region XI), registered slower year-on-year price increases, thus resulting in a moderated overall inflation of 0.8 percent in July 2015 for from 1.4 percent in June 2015 and 5.1 percent same period a year ago.
Amid low and stable inflation this year, Balisacan emphasized the need for the government to be wary of the upside risks to inflation such as the occurrence of typhoons in the second semester which is expected to be intensified by the prolonged El Nino.
“Continued monitoring of agricultural areas is important to ensure that appropriate policy actions are implemented without delay,” said Balisacan.