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Freeman Cebu Business

Inflation slows to 3.7% in November

C&C VIEWS - Ed Limtingco - The Freeman

According to the Institute for Development and Econometric Analysis, Inc. latest NewsBriefs, Inflation slows to 3.7percent in November 2014. Touching on its lowest rate for the year, annualized inflation decelerated to 3.7percent in November 2014, following a 4.3percent rate a month earlier. Core inflation, which nets out food and energy prices for their volatility, also eased to just 2.7percent, from 3.2percent in October 2014.

Fueling the inflation slowdown was the slower price increases in food, electricity, LPG, and gasoline. Food prices, for instance, cooled down to 6.7percent from 7.2percent the previous month.

November’s official data has brought the year-to-date inflation at 4.3percent, comfortably within the government’s 2014 inflation target range of 3-5percent.

By region, inflation in NCR was slower than the national average at just 2.4percent. While in Areas outside NCR, inflation registered at 4percent.

The National Economic Development Authority (NEDA), meanwhile, cautions against possible price increases due to upcoming holiday season, along with the possible natural calamities. Director-General Arsenio Balisacan remains confident regarding the country’s buoyant economic activity given strong fundamentals.

Per IDEA, inflation in the Philippines dipped to its slowest in a year at just 3.7percent as prices of food, electricity, oil and petroleum products went down in November 2014. Despite the inflation highs of 4.9percent just months earlier, year-to-date inflation appears manageable at 4.3percent. Key officials, however, cite the inflation risk posed by the upcoming holidays.

Likewise per same published report, the national government’s outstanding debt stood at P5.7 trillion by the end of October 2014, P9.4 billion lower from a month earlier. Both the domestic and external components of the debt declined by P3.3 billion and P6.1 billion respectively. The Bureau of Treasury highlights the increased portion of the debt in local currency, reducing risk against foreign exchange fluctuations.

Furthermore, the non-performing loans held by rural and cooperative banks fell from P18.11 billion in the first quarter to P17.87 billion in the second quarter of 2014. Due to the decline in the total loan portfolio of these banks, however, their NPL ratio slightly worsened from 13.14percent to 13.45percent over the same period. Rural and cooperative banks corner 2.55percent of the banking industry’s total loan portfolio of P5.2 trillion.

Moreover, the Bangko Sentral ng Pilipinas reports that the country’s gross international reserves amounted to $79 billion by the end of November 2014, slightly lower than the $79.4 billion registered a month ago. According to the BSP, the reserves remain ample as it can cover nearly 11 months’ worth of imports. Net international reserves, which deducts the country’s total short term liabilities, also stood at $79 billion.

Lastly it was reported that the financial inclusion in the Philippines has been hailed as one of the best by the Economist Intelligence Unit. The country scored 79 out of 100 based on various indicators, topping the Asian region, and is only behind Peru and Columbia around the world, according to IDEA.

elimtingco@yahoo.com

BANGKO SENTRAL BILLION BUREAU OF TREASURY DEVELOPMENT AND ECONOMETRIC ANALYSIS DIRECTOR-GENERAL ARSENIO BALISACAN ECONOMIST INTELLIGENCE UNIT INFLATION NATIONAL ECONOMIC DEVELOPMENT AUTHORITY PERU AND COLUMBIA PILIPINAS
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