The Philippine’s annual headline inflation rate remained stable at 2.6 percent in May as most commodity groups recorded slower growth of prices, data from the National Statistics Office (NSO) showed on Wednesday.
The May headline inflation is of the same rate as April 2013 but lower compared to the 2.9-percent rate a year ago. It was also within the 2.2-percent to 3.1-percent projection of the Bangko Sentral ng Pilipinas (BSP) for the month, and lower than its 3-percent to 5-percent full-year target.
“This still leads us to an average inflation rate of 3 percent for the first five months of 2013, exactly at the low-end of the Development Budget Coordination Committee’s inflation target of 3 percent to 5 percent for 2013,” Socioeconomic Planning Secretary Arsenio Balisacan said in a statement.
Balisacan, who is also the National Economic and Development Authority director general, said that the stable general inflation rate in May 2013 relative to the previous month was a result of the slower price increases of major commodity groups counterbalancing the higher growth in prices of selected food items, and lower cutbacks in domestic petroleum prices.
NSO data showed that the heavily weighted food and nonalcoholic beverages index in the Philippines advanced 2.4 percent in May; and housing, water, electricity, gas and other fuels index went up to 1.5 percent.
The index for education retained last month’s rate of 4.4 percent, while the rest of the commodity groups recorded slower annual increments with the transport index still posting a negative annual rate of 0.5 percent.
“The inflation rate of alcoholic beverages and tobacco remained elevated at 31.1 percent owing to the lingering effects of higher sin taxes that took effect early in the year. However, this rate was marginally lower than the previous month’s 31.4 percent,” Balisacan explained.
Meanwhile, the NSO data added that price increments on consumer items in the Philippines slowed down to 0.1 percent in May from 0.2 percent in April.
“While price gains were noted in the heavily weighted food items such as rice, corn, meat, vegetables and selected condiments and seasonings in NCR [National Capital Region or Metro Manila] and in many regions, these were tempered by the slower and negative rates recorded in the prices of items in the other commodity groups,” it stated.
The NSO data further showed that the annual inflation in Metro Manila went up to 1.8 percent in May from 1.7 percent in April as higher annual increases were observed in the indices of food and nonalcoholic beverages and housing, water, electricity, gas and other fuels.
Similarly, annual inflation in areas outside Metro Manila rose 2.9 percent in May from 2.8 percent in April as annual growths in food and nonalcoholic beverages and housing, water, electricity, gas and other fuels indices moved upward during the month, the data added.
Ready to act
For his part, BSP Governor Amando Tetangco Jr. said in a text message that the central bank remained mindful of local and global developments.
These developments, he said, includes pending petitions for power rate adjustments and shifts in capital flows and market sentiment that could impact financial and real asset prices going forward.
“BSP has policy space to address inflation pressures from these impulses, and is ready to make policy adjustments as needed,” he added.