Philippine inflation eases to 1.3% in December 2015

CEBU, Philippines - Inflation slowed in January 2016 due to slower price movements in both food and non-food items.

The Philippine Statistics Authority reported yesterday the consumer price index rose 1.3 percent last month from 1.5 percent in December.

Last month's inflation was within the 0.8-1.6 percent forecast of the Bangko Sentral ng Pilipinas and exactly the same as the median forecast of 1.3 percent. It was also lower than the 2.4 percent inflation rate in January 2015.

In a statement yesterday, Economic Planning Secretary Emmanuel F. Esguerra said: "Good weather conditions at the onset of 2016 allowed prices of these food items to stabilize."

Price growth in non-food items also slowed down especially transport.

"Domestic prices of petrol – gasoline, liquefied petroleum gas, diesel and gasoline – continued to go down. This was still due to persistent global oversupply and record stockpile of crude oil which weakened prices of Dubai oil, Brent and West Texas Intermediate (WTI)," said Esguerra, who is also National Economic and Development Authority director general.

Core inflation, which excludes volatile prices of energy and food, also eased to 1.8 percent last month from 2.1 percent in December.

Risk remains

Esguerra, however, warned that the risk of higher food prices in the first few months of this year remains. "While it is noted that El Niño will gradually weaken beginning next month, the onset of the summer season may constrain farm output," Esguerra said.

He added food import requirements must accurately be determined to avoid supply disruptions, thus keeping inflation stable in the coming months.

And with the projection that low oil prices will continue, the NEDA official warned of the potential negative impact from the economies of oil-producing countries.

He said the event could adversely affect overseas Filipino workers as governments of these economies implement austerity measures, cut back on subsidies, postpone infrastructure outlays and raise taxes. He added the government must intervene to help displaced workers by giving livelihood and placement services.