JAN ‘14 INFLATION ACCELERATES ON HIGHER FOOD PRICES

MANILA—More costly food items resulting from bad weather conditions pushed headline inflation to 4.2 percent, according to the National Economic and Development Authority (NEDA).

“In January 2014, most food items recorded faster inflation due to tight market conditions as a result of inclement weather,” said Economic Planning Secretary Arsenio M. Balisacan.

Data from the Philippine Statistics Authority show that prices of food rose by 5.7 percent in January 2014, higher than 5 percent in December 2013.

According to him, the increase in rice prices was particularly faster following tight supply conditions in major rice producing provinces due to lean harvests in the second and third quarters of 2013.

He added that unfavorable weather conditions also affected the production of selected vegetables and weighed in the higher prices of goods last month.

“On the other hand, prices of local petroleum and power were restrained last month, tempering the effect of higher inflation of other major consumer products,” Balisacan, who is also NEDA Director-General, stressed.

Petroleum rate retained their momentum following lower crude prices in the world market, while generation charge of the Manila Electric Railroad and Light Company (MERALCO) was still pegged at November 2013 rates, lower than a year ago.

Thus, inflation among non-food items went up marginally by 2.8 percent in January 2014 from 2.7 percent the preceding month.

Meanwhile, Balisacan noted that despite the acceleration of inflation since September 2013, this year’s prices of basic commodities are expected to remain manageable.

“In the absence of major shocks, we expect that headline inflation in 2014 could average around 4.4 percent, still within the DBCC (Development Budget Coordination Committee) target of 3 to 5 percent for the year,” the Cabinet Official said.

This is consistent with the Bangko Sentral ng Pilipinas’ (BSP) forecast of a within target inflation rate for 2014 and 2015 due to manageable demand side pressures and firmly anchored inflation expectations.

Inflation of neighboring countries in the ASEAN region recorded mixed adjustments in January 2014 and December 2013. 

Headline inflation in January 2014 slowed down in Indonesia but edged up in Thailand. In December 2013, inflation in Singapore moderated while it sped up in Malaysia.

M.R. No. 2014-008                                                                                 

05 February 2014