Inflation in decline for low-income households
INFLATION, as experienced by low-income families, slowed in the first quarter of 2015 as fuel, light and water costs dropped further and food remained cheap, the Philippine Statistics Authority (PSA) reported yesterday.
The consumer price index (CPI) — a measure of the average rate of change in the retail price of a basket of goods and services — showed inflation for the bottom 30% of households easing to 3.1% in the first quarter from 5.1% in the preceding quarter and 5.7% year on year.
For all households, the PSA is scheduled to report April inflation rate data on May 5.
The CPI for the bottom 30% income segment reconfigures the model basket of goods to reflect a food, beverage and tobacco (FBT) weighting of between 74.5% for the Philippines overall and 74.9% for the NCR. This and other reweightings are thought to more accurately capture the spending patterns of the poor.
The nationwide CPI weighting for FBT is 50%.
“The downtrend was brought about by the negative annual rate posted in fuel, light and water (FLW) index and the slower annual mark-ups in food, beverages and tobacco (FBT), clothing and services indices,” the PSA said.
Inflation in the FLW index decelerated to 7.5% in the first quarter of this year from last quarter’s 2.2%. The FBT index growth slowed to 4.5% from 6.6%.
Price growth in the clothing and services indices also slowed to 2% and 1.2%, respectively, from year- earlier levels of 2.2% and 1.5%.
Inflation for the bottom 30% segment in the National Capital Region ( NCR) declined to 1.5% from the previous quarter’s 3.6% “due to the annual decrease observed in the FLW index,” the PSA said.
Areas outside the NCR also recorded slower inflation at 3.1% from 5.1%.
The slowest growth was seen in Central Luzon at 1.2% while the highest was in the Mimaropa and Davao regions at 4.5%
“Inflation for low- income families should continue to trend lower on a year-on-year basis in the second quarter due to sustained weakness in oil prices, which drives the drop in the fuel, light, and water index. The energy supply situation has also held up well even during the maintenance shutdown of the Malampaya facility and a mild dry spell,” said Remrick E. Patagan, research director at the Institute for Development and Econometric Analysis, Inc., in an e-mail.
Mr. Patagan also stressed the significant moderation in food prices from year- earlier levels. The category accounts for the largest share of the consumer basket for low-income families.
“Recent upward adjustments in utility rates and fuel prices will probably lead to higher inflation next quarter relative to the previous one, but is expected to remain significantly lower than the yearago level,” he noted.