April inflation slips to lowest at 2.2 %

MANILA — Prices in April increased at their slowest pace since the third quarter of 2013, as the cost of housing, utilities, fuel, transport and communication continued to shrink.

In a report, the Philippine Statistics Authority (PSA) said inflation eased to 2.2 percent last month from 2.4 percent last March and 4.1 percent in April of last year.

The latest headline number was the lowest since the 2.1 percent of August 2013. Last month's inflation also brings the year-to-date average to 2.3 percent, near the lower end of the Bangko Sentral ng Pilipinas' full-year target range of 2-4 percent.

According to the PSA, the drop in inflation was due to the continued slide in prices for housing, utilities, fuel, transport and communication. Prices of food and nonalcoholic beverages, clothing and footwear, health, and restaurant and miscellaneous goods and services increased at a slower pace.

Excluding the volatile food and energy prices, core inflation likewise eased to 2.5 percent last month from 2.7 percent in March and 2.9 percent in April of last year.

Emmanuel Esguerra, deputy directorgeneral of the National Economic and Development Authority (NEDA), said the slowdown in inflation would fuel consumer spending. Household expenditures comprise two-thirds of the economy.

“The peso is expected to remain relatively stable given the country’s strong external position owing to strong remittances and foreign direct investment inflows, ample international reserves, and a manageable level of external debt. Overall, these conditions are seen to contribute to stable domestic prices going forward,” Esguerra said in a statement.

Despite the above, Esguerra said the El Niño dry spell still poses a risk to inflation.

“Regular monitoring of drought incidence in agricultural areas should be continued to ensure that appropriate policy actions are implemented without delay. Timely importation of rice to augment domestic supply should serve as a ready measure to prevent the repeat of the high rice prices witnessed in the third quarter of 2013 until 2014,” he said.

Likewise, the government should look into more lasting solutions to the congestion that plagued Manila ports to avoid future disruptions in the domestic supply chain. To recall, an expanded truck ban imposed by the Manila City government last year led to containers piling up at the ports, with the delay in deliveries causing prices to spike. (Interaksyon.com)