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By Darwin G. Amojelar, Reporter
Prices of goods and services in April rose at
their fastest pace in three years on costlier food and electricity,
the government reported on Tuesday.
The National Statistics Office said inflation
rate rose 8.3 percent in April from 6.4 percent in March.
This was the highest inflation rate since May
2005 at 8.5 percent and above the Bangko Sentral ng Pilipinas
estimates of 6.4 percent and 7 percent. A year ago, it was 2.3
percent.
The Bangko Sentral, however, said price
movements are likely to return to manageable levels as a result of
expected higher food production.
“The continued uptick was [what had been]
projected, although the magnitude was higher than expected. This
rise was brought about primarily by increases in all commodity
groups in the basket,” central bank Gov. Amando Tetangco Jr. told
The Manila Times in a text message also on Tuesday.
“As base effects dissipate and as measures to
stabilize supply take root, we remain convinced that the price
movements will revert to manageable levels over the policy
horizon,” Tetangco said.
In the first four months of 2008, inflation, or
the increase in prices of goods and services, averaged 6.2 percent,
surpassing the Bangko Sentral’s full-year inflation target of 3
percent to 5 percent for this year.
“The elevated prices of oil and non-oil goods
continue to pose challenges for policy makers, although for some
commodities, supply responses [and] higher production should
eventually temper the price spikes,” Tetangco said.
High demand for rice and the rise in prices, he
added, will drive farmers to produce more rice for the market.
Higher rice prices, Tetangco said, will raise productivity of the
farmers.
Despite the high inflation and rate cut by the
US Federal Reserve rate, the Bangko Sentral maintained its interest
rates at 5 percent for overnight borrowing rates and 5.75 percent
for overnight lending rates in the last policy meeting.
Some analysts expect inflation to peak at 9
percent by the end of the second quarter of 2008 and to slow down in
the last quarter of the year.
Economic growth is seen to also slacken this
year as a result of the high inflation. The Development Budget
Coordinating Committee has projected the country’s gross domestic
product (GDP) to grow between 6.3 percent and 7 percent in 2008 from
a three-decade high of 7.3 percent last year. GDP refers to the
total value of goods and services produced in a country in a year.
Inflation for the first four months of the year
reached 6.2 percent, which is significantly above the 3-percent to
5-percent target range for 2008.
The statistics office said excluding select food
and energy items, core inflation went up to 5.9 percent in April
from 4.8 percent in March. It added that the overall annual
inflation rate for food alone climbed to 12 percent in April from
8.4 percent in March.
Inflation for food, beverages, and tobacco rose
to 11.4 percent in April from 8.2 percent in March; clothing, 3.9
percent from 3.6 percent; H&R (housing and repair), 3.8 percent
from 3.1 percent; FLW (fuel, light, and water), 8 percent from 6.2
percent; services, 6.9 percent from 6.4 percent; and miscellaneous
items, 2.6 percent from 2.4 percent.
“The rising prices of rice nationwide and the
general price mark-ups in other food items such as corn, canned
fish, select fresh fish species, meat, cooking oil, and select
spices and seasonings were responsible for the 2-percent increment
in the national month-on-month inflation rate in April from 0.9
percent in March,” the statistics office said.
Costlier rice
Prices of rice rose to 24.6 percent in April
from 10.9 percent in March and corn was up 19.3 percent from 8.4
percent.
In Metro Manila, the price of rice rose at 38.4
percent in April from 19.6 percent in March, while outside Metro
Manila, the price of rice jumped to 22.7 percent in April from 9.6
percent in March.
Socioeconomic Planning Secretary Augusto Santos
said the rising food prices in the international market exerted
pressure on local counterparts as prices of rice and corn increased
by double-digit rates compared to the previous month.
“For rice alone, 11 out of 17 regions posted
double-digit month-on-month inflation rates with the highest coming
from Central Visayas at 18.6 percent. Historically, this is the
highest nationwide increase in rice prices since the 11.5 percent in
uptick from December 1998 to January 1999,” Santos added.
In addition, the price of cereal preparations
nationwide soared 13.9 percent; dairy products, 13.2 percent; eggs,
8.4 percent; fish, 8.8 percent; meat, 9.8 percent; and miscellaneous
foods, 6.3 percent.
The statistics office said the continued tight
supply of pork triggered price increments in all areas.
Prices of beef and chicken were also on the
uptrend during the month.
A slower annual price gain, however, was
recorded in fruits and vegetables at 7.8 percent from 10.2 percent.
The statistics office said the upward trend can
also be attributed to higher electricity rates in Metro Manila and
the series of price increases in gasoline and diesel nationwide.
Expensive electricity
“Price add-ons in kerosene and higher
electricity rates in NCR [National Capital Region, or Metro Manila]
raised the FLW index in the area and in the Philippines by 5 percent
and 1.8 percent, respectively, from their corresponding last
month’s rates of 2.1 percent and 1.6 percent,” it added.
The NSO said the annual inflation rate in NCR
jumped by 2 percentage points, to 7.4 percent in April from 5.4
percent in March due to hikes in the annual price increments posted
in all the commodity groups.
-- Maricel E. Burgonio
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