Inflation eases to new record low in August

MANILA, Philippines - The country's inflation rate continued to plunge further from 0.8 percent in July to a record low of 0.6 percent in August this year, the National Economic and Development Authority (NEDA) announced on Tuesday.

The NEDA said downward price pressures in food, energy and oil rates restrained inflation to its new lowest level. Inflation a year ago was at 4.9 percent.

“The current low inflation environment exhibited in the first eight months of 2015 has supported domestic demand, particularly household consumption, and we expect this to persist throughout the rest of the year,” NEDA Director-General Arsenio Balisacan said in a statement.

The latest inflation rate brought the year-to-date headline inflation to 1.7 percent, which is below the government's target range of 2 to 4 percent for 2015.

However, the figure was within the 0.2- to 1-percent forecast of the Bangko Sentral ng Pilipinas.

READ: Inflation seen still below 1% in August

Slower price adjustments in bread and cereals, fish and fruits eased the inflation in the food subgroup from 1.3 percent to 1.2 percent.

Meanwhile, inflation slowed in non-food commodities from 0.4 percent in July to 0.2 percent in August due to lower electricity rates and oil prices.

“Food inflation and international oil prices are expected to remain low and will constrain any upward price movements in the near term,”  Balisacan said.

Inflation in the National Capital Region also slowed down from 0.8 percent to 0.2 percent while inflation in other regions of the country remained at 0.8 percent.

Balisacan noted that the strengthening El Niño in the country poses a risk to inflation.

“We need to reinforce our El Niño preparations to ensure food security. The strong collaboration of the national government, local government units, and the private sector is essential to the success of efforts to mitigate the effects of El Niño,” the NEDA official said.

The NEDA has started drafting the Roadmap to Address the Impact of El Niño.