Headline inflation rose to 1.5 percent in the second quarter of 2016 on upticks in food and non-food items. The rate remained subdued as the year-to-date average stood below the government’s target range of 2-4 percent for the year, the central bank said on Friday.
The consumer price index (CPI), said the Bangko Sentral ng Pilipinas (BSP) in its Second Quarter 2016 Inflation Report, has advanced from 1.1 percent in the first quarter of 2016.
“The higher headline inflation print during the quarter was driven by higher prices of food commodities amid tighter domestic supply,” it said.
According to the report, food inflation accelerated to 2.3 percent in the second quarter from 1.6 percent in the previous quarter on tighter domestic supply of agricultural products due to El Niño and pest infestations.
Year-on-year, prices of key food commodities such as meat, fruits, milk, cheese, and eggs rose during the review quarter while vegetable price inflation remained at double-digit level.
By contrast, rise prices continued to decline compared to year-ago levels on the of ample supply due to the onset of the summer harvest season and arrival of additional rice imports, it added.
“Similarly, non-food inflation rose on service-related CPI items as well as clothing and footwear,” it also added.
Non-food inflation during the quarter inched up to 0.6 percent from 0.5 percent in the previous quarter with clothing and footwear, health and catering services contributed the most.
“Meanwhile, due mainly to the approved tuition fee hikes in most regions by the Commission on Higher Education for the academic year 2016-2017, education inflation continued to increase, albeit slightly slower than in the previous quarter,” it stated.
The higher inflation in food and selected non-food items more than offset the continued decline in oil-related CPI items such as electricity rates and prices of domestic petroleum products relative to year-ago levels.
“This brought average inflation for the first six months of the year to 1.3 percent, lower than the national government’s range target of 3.0 percent plus-or-minus 1.0 percentage point for 2016-2018,” it said.