INFLATION DECELERATED IN MARCH 2013

MANILA—Cheaper housing, water, electricity and power coupled with slower increase in food prices in March 2013 moderated headline inflation to 3.2 percent last month, according to the National Economic and Development Authority (NEDA).

“Average inflation rate for the first three months of 2013 remained at 3.2 percent, well within the Development Budget Coordination Committee’s inflation target of 3.0 to 5.0 percent for 2013,” said Socioeconomic Planning Secretary Arsenio M. Balisacan.

The growth in consumer prices in March was lower compared to the previous month, although this was higher against the 2.6 percent inflation recorded in March 2012.

“Lower prices of food (except vegetable), electricity and petrol pulled headline inflation down in March, while uptick in the prices of non-food items, particularly alcohol and tobacco, partially moderated the decrease,” said Balisacan, who is also NEDA Director General.

Ample supply of rice, corn, meat, fish, milk and fruits slowed down the increase in food prices that only went up by 2.8 percent in March 2013, slower than the 3.0-percent increase in the previous month. Similarly, the price index of non-alcoholic beverages moderated from 3.7 percent in the previous month to 3.6 percent in March 2013.

Among food items, only the index for vegetables posted a year-on- year uptick of 3.2 percent during the period from 1.4 percent in the preceding month following the Lenten season.

Prices of non-food items, particularly electricity and petrol as well as operation of personal transport equipment, declined in March 2013. This is attributed to the reduction in Manila Electric Company’s (MERALCO) generation charge last month and the cheaper retail prices of domestic petroleum products. 

Meanwhile, prices of alcoholic beverages went up by 10.9 percent while that of tobacco accelerated by 52.3 percent as a result of the new sin tax law effective 01 January 2013. The price indices of these commodities are expected to remain high until the end of 2013.

Other non-food items that posted higher increments in March include footwear, recreational and cultural services, newspapers, books and stationery, catering services, and other personal effects.

Meanwhile, headline inflation in the National Capital Region (NCR) eased to 1.9 percent in March 2013, slower compared to 2.3 percent in February 2013 and 2.7 percent in March 2012. This is slower than the inflation rate in Areas Outside NCR (AONCR) that likewise fell to 3.6 percent in March 2013.

Balisacan stressed that the March 2013 headline inflation of the Philippines remains lower than that of Indonesia (5.9%) but higher compared to Thailand (2.69%).

M.R. No. 2013-037                                                                        

05 April 2013