Inflation quickens to 2.5% in November – PSA report

Inflation quickened by more than twice as fast in November from a year earlier, due to higher prices of food and non-food items, data released by the Philippine Statistics Authority (PSA) on Tuesday showed.

"The country’s annual headline inflation increased to 2.5 percent in November 2016.  It was at 2.3 percent a month ago and 1.1 percent in November 2015," the statistics office said.

"This was attributed to higher annual increments registered in the indices of alcoholic beverages and tobacco; housing, water, electricity, gas, and other fuels; and transport," it added.

Excluding selected food and energy items, core inflation picked up 2.4 percent in November 2016. Last month, it was recorded at 2.3 percent and in November 2015, 1.8 percent, the PSA noted.

While food inflation was unchanged at 3.5 percent month-on-month, with rice prices snapping a five-month uptrend and corn prices still on the wane, food prices actually accelerated by nearly twofold from 1.7 percent year-on-year.

"The decrease in rice prices signals the recovery of the rice sector from the devastation of typhoons Karen and Lawin. We must foster technological advances in agriculture to decrease the susceptibility of our crops to natural calamities," Socioeconomic Planning Secretary Ernesto M. Pernia said in an emailed statement.

Typhoons Karen and Lawin  hit the country in late October with the damage to agriculture and infrastructure estimated at P2 billion each.

The latest numbers also compare with the 1.6 to 2.4 percent projected earlier by the Bangko Sentral ng Pilipinas (BSP).

"While higher than last October and slightly above the upper end of our forecast range for the month, the November figure brings the year-to-date average to 1.7 percent, still below the lower bound of the National Government target range of 2 to 4 percent," BSP Governor Amando M. Tetangco, Jr. said in a text message to reporters.

"Nevertheless the trend is consistent with our expectation that for 2017 to 2018, full year inflation would be within target," he added.

During its November 10 meeting, the Monetary Board expected the full-year inflation to register at 1.8 percent for the whole of 2016.

"We continue to watch petitions for transport fare adjustments and global developments that may affect domestic inflation dynamics over the policy horizon,"  Tetangco said.

"Overall, we expect the full year inflation for 2016 to be well within the government's inflation target band of 2 to 4 percent. The overall balance of risks is tilted on the upside, with supply-side factors as the main contributor to price adjustments," Pernia noted. — VS, GMA News