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By Darwin G. Amojelar,
Reporter
Soaring food and fuel prices
caused the inflation rate to surge to a nine-year high in May, the
National Statistics Office reported Thursday.
The record inflation rate sent
Philippine share prices closing at 1.97 percent lower, stoking
expectations of a hike in interest rates, dealers said.
The composite index lost 54.70
points to 2,718.42. The all-share index was down 26.84 points to
1,697.07 points.
The statistics office said the
inflation rate rose 9.6 percent in May from 8.3 percent in April,
primarily triggered by unabated price increases in the
heavily-weighted food, beverages and tobacco index. A year ago, the
inflation rate was 2.4 percent.
The agency added that the rest of
the commodity groups also posted higher inflation rates in May.
Inflation is an increase in the volume of money and credit relative
to available goods and services resulting in a continuing rise in
the general-price level.
The record inflation rate was at
the higher end of the Bangko Sentral ng Pilipinas forecast of
between 8.8 percent and 9.6 percent.
From January to May, the
inflation rate rose 6.9 percent, higher compared to targets of the
Development Budget and Coordinating Committee of between 3 percent
and 5 percent in 2008.
Three economists earlier polled
by The Manila Times had projected the inflation rate in May to hit
9.1 percent on costlier food and oil.
George Worthington, chief
economist for Asia-Pacific IFR Markets, who had forecast the
inflation rate to grow 9.5 percent this month, said “food and fuel
remain key drivers but service prices are also accelerating rapidly,
suggesting inflationary pressures are becoming more broad-based.”
Excluding select food and energy
items, core inflation advanced to 6.2 percent in May from 5.9
percent in April.
Prices for food, beverage and
tobacco surged to 13.7 percent in May from 11.4 percent in April;
clothing, 4 percent from 3.9 percent; house and repairs, 4 percent
from 3.8 percent; fuel, light and water, 8.2 percent from 8 percent;
services, 7.8 percent from 6.9 percent; and miscellaneous items, 2.7
percent from 2.6 percent.
For food alone, the country’s
annual inflation rate was up to 14.3 percent in May from 12 percent
in April.
The price of rice was higher at
31.7 percent in May from 24.6 percent in April; corn, 27.1 percent
from 19.3 percent; cereal preparations, 15.3 percent from 13.9
percent; dairy products, 13.7 percent from 13.2 percent; fish, 9.6
percent from 8.8 percent; fruits and vegetables, 10.1 percent from
7.8 percent; meat, 10.4 percent from 9.8 percent; and miscellaneous
foods, 7.6 percent from 6.3 percent.
The price of eggs was slower at
7.7 percent in May from 8.4 percent in April.
Prices in Metro Manila
accelerated by 0.9 percentage point, to 8.3 percent in May from 7.4
percent in April due to higher annual price adjustments in food,
beverage and tobacco, services and miscellaneous index.
In areas outside Metro Manila,
annual prices rose to 10.2 percent in May from 8.7 percent in April.
All the commodity groups registered higher annual inflation rates,
except the miscellaneous items index.
In Thursday’s trading, there
were 21 advancers, 31 decliners and 63 stocks were unchanged.
Turnover rose to P2.559 billion ($57.8 million) from P2.3 billion on
Wednesday.
The local currency traded at
44.079 to the dollar.
“The market is down because of
the inflation figures,” said Allan Araullo of Regina Capital
Development Corp.
The market was also weighed down
by expectations that the monetary authorities would announce, later
in the day, that they were raising key interest rates to cope with
the higher inflation.
“We’re seeing negative
impacts on the fund flows to the stock market because the high
inflation may result in a move by the central bank to raise rates,
which may affect the earnings of listed companies,” an analyst of
a major bank told Agence France-Presse.
But Araullo said the market
“has been oversold and volume is very thin, so I guess by next
week, it should go higher.”
Philippine Long Distance
Telephone Co. fell 1.9 percent at P2,510. Ayala Corp. skidded 5.3
percent to P310. Ayala Land fell 2.38 percent to P10.25.
San Miguel Corp. saw its A and B
shares remain unchanged at P41 and P42 pesos.
--With AFP
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