INFLATION SLOWS DOWN IN MARCH 2014

MANILA – Headline inflation slowed down in March despite a general increase in food prices due to slower growth in alcohol, tobacco, electricity and LPG prices, according to the National Economic and Development Authority (NEDA). 

This statement came after the Philippine Statistics Authority (PSA) reported that last month’s headline inflation eased to 3.9 percent, lower than the 4.1 percent in February.

“The slower growth in the price indices of alcoholic beverages and tobacco in March 2014 may be attributed to the dissipated impact of the sin tax reform law. During the period, prices of tobacco and alcoholic beverages dropped significantly. If not for an uptick in the price index of the heavily weighted food and non-alcoholic beverages, inflation could have been lower during the period,” said Economic Planning Secretary Arsenio M. Balisacan.

Data from the PSA revealed decreased inflation in alcoholic beverages and tobacco (4.9% in March 2014 from 7.1% in February 2014) and housing, water, electricity, gas and other fuels (2.7% from 3.6%).

However, the March inflation was higher than the 3.2 percent in the same period a year ago.

Inflation in the food and non-alcoholic beverages increased further to 6.0 percent from 5.9 percent in the previous month as majority of food items recorded faster year-on-year growth.

Due to tight domestic supply, rice prices continued to increase (11.8% from 10.7%). According to the PSA report, the total rice stock inventory in commercial warehouses and NFA depositories as of 01 February 2014 was lower relative to the January 2014 and February 2013 levels.

Prices of meat, fruits, and milk were also on the uptrend in March 2014. Conversely, price inflation of vegetables decelerated to 8.7 percent from 12.0 percent while the growth in the price index for fish remained relatively stable at 3.9 percent.

Inflation among non-food items eased to 2.5 percent in March 2014 from 2.7 percent in February 2014 mainly due to slower inflation in the price indices of electricity, gas and other fuels price (4.4% from 6.8%). The generation charge of MERALCO declined by 1.9 percent or by PhP0.45/kWh year-on-year in March 2014 from a 5.6 percent year-on-year increase in February 2014 due to lower generation costs from suppliers.

In the National Capital Region, headline inflation was up a tad to 2.9 percent from 2.8 percent in February 2014, and 1.9 percent a year ago. In areas outside Metro Manila, headline inflation moderated to 4.2 percent in March 2014, slower than the 4.5 percent in February 2014, but higher compared to 3.5 percent a year ago. 

Meanwhile, inflation among the Association of Southeast Asian Nations (ASEAN)-5 countries were on mixed adjustments in March 2014. Inflation rates of the Philippines and Indonesia decelerated while that of Thailand inched up. In February 2014, inflation rate eased in Singapore but inched up in Malaysia.