December inflation slows down to 2.9%

Despite slight increases in the costs of food and so-called "sin" products that drove consumer prices a bit faster in December, inflation settled at the lower end of 3 percent to 5 percent targeted by the government for 2012.

 

Headline inflation moved by 2.9 percent in December, nearly unchanged from 2.8 percent in November 2012 and much slower than the 4.2 percent in December 2011. 

 

The December inflation "was effected by higher annual rates in the food and non-alcoholic beverages and alcoholic beverages and tobacco indices," NSO administrator Carmencita Ericta noted in a statement Friday.

 

It pushed the inflation rate for the whole of 2012 to 3.2 percent – the exact forecast of the Bangko Sentral – from 4.6 percent in 2011. 

 

The Bangko Sentral ng Pilipinas expected inflation to settle between 2.6 percent and 3.5 percent last month. 

 

Because of annual adjustments the heavily-weighted food and non-alcoholic beverages index rose 2.3 percent in December from 2.2 percent in November, while the alcoholic beverages and tobacco index inched up 5.1 percent from 5.0 percent, NSO data showed.

 

"Inflation for December at 2.9 percent, brings the full year average to 3.2 percent, making 2012 the fourth consecutive year that BSP is able to keep inflation within the government's target," Bangko Sentral Governor Amando Tetangco Jr. said in a text message to reporters. 

 

The latest inflation data "supports our outlook that inflation is manageable," Tetangco noted.

 

Benign inflation outlook coupled with expectations that economic growth will remain robust "suggests our current policy settings are appropriate," he added. 

 

Despite meeting its inflation target, the Bangko Sentral last month said the rise in consumer prices will likely slow down to  3.1 percent in 2013. 

 

On Thursday, Tetangco hinted that monetary officials will likely keep benchmark interest rates at record lows in tandem with the slow inflation outlook.  — VS, GMA News