INFLATION CONTINUES TO SLOW DOWN IN NOVEMBER 2012

MANILA—Ample supply of agriculture and fish and lower prices of domestic petroleum helped slowed down the movement of prices in November 2012, according to the National Economic and Development Authority (NEDA).

The NEDA made this statement after the National Statistics Office (NSO) reported that headline inflation eased to 2.8 percent in November 2012.

“The abundant supply of agriculture and fishery products in November 2012 resulted in greater annual reductions in the prices of various food items compared to the previous month,” said NEDA Officer-in-Charge (OIC) Rolando G. Tungpalan.

The NEDA OIC said that slower increase in prices was observed in major food items such as fish (5.9% in November 2012 from 6.0% in October 2012), milk, cheese, and eggs (3.3% from 3.4%), and fruits (4.9% from 5.2%). This was also coupled with the decline in prices of vegetables (-5.3% from -0.1%), and oils and fats (-4.9% from -4.5%).

“Slower increases of prices in electricity, gas and other fuels were also observed in November 2012 (3.1% from 4.9% last year) due to the contraction in Manila Electric Company’s (MERALCO) generation charge and the lower prices of kerosene and diesel,” said Tungpalan.

Citing industry sources, Tungpalan said that MERALCO’s generation charge in November 2012 was lower by 2.7 percent (PhP0.16/kWh) against the same period in 2011 due to lower generation costs from suppliers.

He also said that prices of kerosene also slowed down, falling by 2.5 percent in November 2012 from an increase of 3.5 percent in October 2012.  Furthermore, diesel prices fell by 4.6 percent from 3.1 percent.

“These were due to the trimmed trading price of Dubai crude in the international market, which contracted by 1.6 percent from a 4.8 percent growth in October 2012,” said Tungpalan.   

November 2012’s record for consumer prices brings the year-to-date headline inflation to a stable rate of 3.2 percent.

“The average inflation from January to November 2012 remains within the Development Budget Coordination Committee’s target range of 3.0 to 5.0 percent for 2012,” Tungpalan said.

Core inflation likewise decelerated for the month of November 2012 to 3.4 percent against 3.6 percent recorded in the previous month or 4.5 percent in November 2011.

“The lower core inflation implies an easing of demand pressures on consumer prices.  With the continued benign price increases for the period, we are expecting that inflation should be manageable for the rest of the year,” the NEDA official said.

Inflation rate is the percent increase in the prices of goods and services commonly purchased by households, as measured by the Consumer Price Index (CPI).  On the other hand, core inflation represents a more long-term inflation trend, as it excludes certain items that have short-term and volatile price movements.

Inflation rate in Metro Manila also eased to 2.6 percent in November 2012 from 2.9 percent in October 2012. Similarly, the inflation rate outside the capital slowed in November 2012 to 2.9 percent from the previous month’s 3.3 percent. 

From January to November 2012, the year-to-date inflation in Metro Manila stood at 2.9 percent, slower than the average movement of prices outside Metro Manila, which is at 3.3 percent.

Tungpalan, who is Deputy Director-General of NEDA’s National Development Office for Investment Programming, is currently OIC of NEDA while Socioeconomic Planning Secretary and NEDA Director-General Arsenio M. Balisacan is on official business abroad.

M.R. No. 2012-084

05 December 2012