Inflation in April 2016 stayed the same at 1.1 percent as in the previous month, according to the National Economic and Development Authority (NEDA).

“Price movements for major commodity groups remained unchanged, while the slight price increases in some commodities were offset by downward price adjustments in others,” said Socioeconomic Planning Secretary Emmanuel F. Esguerra.

The April 2016 inflation is below the market expectation of 1.2 percent but within the Bangko Sentral ng Pilipinas’ forecast of 0.7-1.5 percent.

Core inflation, which excludes volatile prices of energy and food, likewise remained at 1.5 percent and lower than the 2.5 percent in April 2015.

For the first four months of 2016, year-to-date inflation stood at 1.1 percent, lower than the 2.3 percent of the same period a year ago.

“This supports favorable demand prospects and is broadly in line with the expectation of brisker operations during the election period and anticipated pick-up in the economic activity during the summer season,” he said.

Prices of commodities in the food subgroup have been on a declining trend since January 2016, though a slight uptick in April was observed relative to the previous month.

“Worth noting is the monthly downward trajectory of prices of rice, which was partly due to the timely arrival of additional rice importation. This ensured sufficient supply during the start of the year,” said Esguerra, who is also NEDA Director General.

Inflation in the non-food subgroup inched up by only 0.1 percent despite upward price movements in several commodities.

“This is largely due to the stable prices of housing, water, electricity, gas and other fuels. The decline in electricity, gas and other fuels, as well as in the actual rentals for housing offset the upward price adjustment in water supply and miscellaneous services relating to the dwelling,” he said.

Esguerra warned however of the upside risks in the medium-term due to a potential recovery in oil prices, El Niño, and the possible occurrence of La Niña in the latter part of 2016.

“International oil prices remained below 2015 levels and this is projected to become unstable on the back of a potential oil production freeze over the medium term by Russia and selected members of the Organization of the Petroleum Exporting Countries,” he said.

On the domestic front, Esguerra stressed that with the El Niño phenomenon likely to last until July 2016, appropriate timing of rice importation remains critical to avoid supply disruptions which could result in unstable rice prices.

On the other hand, he noted that further intensification of La Niña in the second half of the year could provide upside pressures on the prices of agricultural commodities and utilities.

“To help mitigate the impact of El Niño and prepare for the highly likely occurrence of La Niña, government agencies should coordinate and study various response measures on their possible effect towards agricultural production,” said Esguerra.