MANILA — Lower food prices and cheaper local petroleum and electricity pulled down inflation rate to 3.7 percent in November, its lowest level this year, according to the National Economic and Development Authority (NEDA).
Inflation rate from January to November 2014 stood at 4.3 percent, well within the Development Budget Coordination Committee’s (DBCC) inflation target of 3.0 to 5.0 percent for 2014.
“This further easing is good news for our economy. Following the slower inflation outcomes in the recent months, we expect that the country’s headline inflation rate for the full year 2014 will be within the DBCC’s full year target,” said Economic Planning Secretary Arsenio M. Balisacan.
For the third consecutive month, food inflation slowed down to 6.7 percent in November 2014 from 7.2 percent in the previous month. “Lower price increases in food backed this slowdown. Food accounts for about 90 percent of food inflation,” said Balisacan.
Inflation of rice, which accounts for about 25 percent in the food consumer price index (CPI), started to ease in November 2014 with higher rice stock inventory and importation. Palay production is expected to recover in the fourth quarter of 2014 and this could further ease price pressures on rice in the coming days.
Meanwhile, Dubai oil prices fell to its lowest levels since 2010. This translated to lower domestic petroleum prices, as observed in double-digit price reductions in unleaded gasoline, diesel, kerosene, and LPG.
Electricity rates were also lower due to the reduction in fuel prices and improved availability of power plants. In particular, the generation charge of MERALCO went down by 9.9 percent in November 2014.
Lower inflation rate was felt across regions. In NCR, inflation rate cooled down to 2.4 percent in November 2014 from 3.6 percent in the previous month. Areas outside of NCR also recorded lower price increases which resulted in overall lower inflation at 4.0 percent in November 2014 from 4.5 percent in October 2014.
“The advent of the Christmas season, however, poses a possible uptick in food prices. Also, given the country’s vulnerability to disasters arising from natural hazards, the government needs to remain vigilant in ensuring adequacy of supply of commodities to keep prices stable,” the NEDA official said.
Nonetheless, Balisacan maintained that economic activity in the Philippines is expected to remain firm given buoyant domestic demand, a strong external position and favorable consumer and business sentiment, which are expected to support the economy going forward.