INFLATION IN 2012 DOWN FROM PREVIOUS YEAR, WITHIN GOVERNMENT TARGET AND FORECAST

MANILA—Full year 2012 inflation averaged 3.2 percent despite headline inflation slightly picking up to 2.9 percent in December from 2.8 percent in the previous month, according to the National Economic and Development Authority (NEDA).

“Inflation for 2012 is well within the Development Budget Coordination Committee’s (DBCC) target of 3.0 to 5.0 percent for 2012.  This is also within DBCC’s 2012 inflation forecast of 3.0 to 3.5 percent and still slower than the 4.6 percent full year inflation average in 2011,” said Socioeconomic Planning Secretary Arsenio M. Balisacan.

Inflation in December 2012 was pushed up by the faster growth in prices of food and non-alcoholic beverages (2.3% in December 2012 against 2.2% in November 2012) as well as alcoholic beverages and tobacco (5.1% against 5.0%).

“However, inflation in December 2012 is still lower compared to other ASEAN countries such as Thailand (3.6%) and Indonesia (4.3%),” the Cabinet official added.

Moreover, core inflation declined slightly to 3.3 percent from 3.4 percent in November 2012 and 4.2 percent in December 2011.

“This brings average core inflation rate to 3.7 percent in 2012, easing the demand pressure on consumer prices,” said Balisacan, who is also NEDA Director-General

Meanwhile, alcoholic beverages and tobacco prices picked up as alcohol price index increased by 4.2 percent in December 2012 from 4.0 percent in the previous month while that of tobacco picked up by 6.1 percent from 6.0 percent in the same month.

In the National Capital Region (NCR), headline inflation increased to 2.8 percent in December 2012 from 2.6 percent in the previous month on the back of higher year-on-year increments in major commodity groups.

Price increases were observed for food and non-alcoholic beverages (2.1% in December 2012 against 1.6% in November 2012); alcoholic beverages and tobacco (6.4% against 6.0 percent); housing, water, electricity, gas, and other fuels (2.6% against 2.5%); health (2.9% against 2.8%); communication (0.9% against 0.8%); and recreation and culture (4.9% against 4.8%).

However, for the year 2012, the average inflation rate in NCR declined to 2.9 percent from 4.0 percent in 2011. Similarly, inflation in Areas Outside NCR (AONCR) also dropped from 4.9 percent in 2011 to 3.2 percent in 2012. 

M.R. No. 2013-001

07 January 2013