NEDA SEES 2012 INFLATION AT LOW END OF 3-5% TARGET

Inflation at 3.2 percent for the first three quarters, says NSO

MANILA—The National Economic and Development Authority (NEDA) expects that the full-year headline inflation rate for 2012 will be at the low end of the government’s target.

The NEDA statement followed the release of the inflation data by the National Statistics Office (NSO) which showed that headline inflation rate in September 2012 eased to 3.6 percent from 3.8 percent last month.

“The September data brought the headline inflation rate for the first three quarters of the year to only 3.2 percent, which is near the low end of the government’s target of 3.0 to 5.0 percent,” said Dr. Rosemarie G. Edillon of the NEDA-National Planning and Policy Staff.

Headline inflation rate is the percent change in the average prices of goods and services commonly purchased by households, as measured by the Consumer Price Index.

Edillon said that lower prices of electricity, unleaded gasoline and kerosene dampened inflation in September 2012.

“We noted that MERALCO’s generation and transmission costs decreased in September 2012 due to the significant decline in the charges imposed by the Wholesale Electricity Spot Market (WESM). This, in effect, resulted in lower electricity bills for consumers during that month,” said Edillon.

Industry data showed that the generation charge in September was lower by PhP1.34 per kilowatt hour (kWh) compared to that in August 2012, and this was the lowest level since March 2012. On the other hand, WESM charges declined to PhP8.74 per kWh in September from PhP14.70 per kWh in August.

Edillon added that the September 2012 inflation was dragged down further by cuts in the price of kerosene, which declined by 5.4% compared to the price in September 2011. On the other hand, there was only a 0.7-percent change in the price of unleaded gasoline for the same period, compared to the 1.7-percent change to the previous period from August 2011 to August 2012.

“While rising food prices exerted pressure on inflation, it was partially tempered by lower increases in the price of fish,” said Edillon.

According to the NSO, inflation for commodities under the food and non-alcoholic beverages group was pegged at 3.7 percent in September 2012, which was much faster than the 3.3-percent inflation in August 2012. Meanwhile, the price of fish increased by only 6.8 percent in September 2012 compared to 7.3% in August 2012.

Edillon said that in selected Southeast Asian countries, inflation generally eased in September compared to the figure in August this year.

“Headline inflation in Indonesia declined in September 2012 and recorded the lowest rate for the same month since 2007. This was attributed to slower upticks in food inflation observed during the period. Other ASEAN countries where inflation declined were Singapore and Malaysia. On the other hand, Thailand’s headline inflation rose to its highest level since the first quarter of this year,” said Edillon.

According to their respective country data, the September 2012 inflation rate in Indonesia was at 4.31 percent, with Singapore at 3.9, Malaysia at 1.4 percent, and Thailand at 3.38 percent.

M.R. No. 2012-069

05 October 2012