Inflation cools further to 2.2% in April

Inflation continued to decelerate in April to mark the slowest reading in five months given the lower transportation prices during the period, the Philippine Statistics Authority (PSA) reported Tuesday.

According to PSA data, inflation clocked in at 2.2% in April. This is slower than the 2.5% in March and the 3.0% in April 2019.

This is also the slowest in five months since inflation was registered at 1.3% in Novermber 2019. 

"The latest inflation number is consistent with the BSP's prevailing assessment that inflation is expected to be benign over the policy horizon due to the adverse impact of the coronavirus pandemic on the domestic and global economy," Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said in a mobile message.

PSA data indicated that the major contributor to the downtrend was the further decrease in the annual rate of transport index at 6.1%, the slowest since October 2015.

Metro Manila and other "high-risk" areas have been on lockdown since March 17, with the enhanced community quarantine in the areas extended twice until May 15. Mass transport has been suspended since then.

Slower annual mark-ups were also seen in alcoholic beverages and tobacco (17.9%); clothing and footwear (2.6); housing, water, electricity, gas (0.3%); health (2.8%); communication (0.3%); and restaurant and miscellaneous goods and services (2.4%).

In the National Capital Region (NCR) alone, inflation eased to 1.2% in April from 1.7% the previous month, and 3.1% in April 2019.

Likewise, areas outside the capital posted a slower inflation of 2.5%, which compares with 2.7% in March and 3.0% in April last year.

"The latest baseline forecasts indicate that inflation could settle at the low-end of the government's target range of 3.0% plus or minus 1.0 percentage point, at 2.0% for 2020 and 2.5% for 2021," said Diokno.

"Growth is expected to bounce back to its potential output growth in 2021 supported by the measures under the government's recovery plan," he elaborated. — RSJ, GMA News