Philippine inflation eases to 2.8%

The Philippine inflation rate has eased to 2.8 percent in June 2017 from 3.1 percent in May, lower than market expectations of 3 percent.

The National Economic and Development Authority (NEDA) says core inflation, which excludes select volatile food and energy prices, also eased to 2.6 percent in June 2017 from 2.9 percent, reflecting the general price stability across goods and services.

Slower price adjustments in both food and non-food commodities contributed to the easing of inflation in June 2017.

For food and non-alcoholic beverages, inflation slowed to 3.5 percent in June from 3.8 percent the previous month.

Non-food inflation slowed to 2 percent in June 2017 from 2.5 percent in May.  This follows the significantly slower year-on-year increase in domestic petrol prices during the period, particularly unleaded gasoline (5.1 percent from 9.9 percent), diesel (5.3 percent from 13.6 percent), and kerosene (3.0 percent from 9.6 percent).

NEDA Officer-in-Charge (OIC) and Undersecretary for Policy and Planning Rosemarie Edillon said that keeping inflation stable strengthens prospects of stronger domestic economic activity in the near-term.

“The significant decline in the probability of extreme weather disturbances due to El Niňo and La Niňa until the end of 2017 bodes well for agricultural production and commodity prices moving forward,” Edillon said.

“Government should take advantage of good weather conditions to accelerate the implementation of climate change adaptation measures. Among the crucial ones are investing in infrastructure like catchment basins, advance atmospheric moisture extraction, and promoting water-saving technology. Rehabilitation of damaged irrigation systems and periodic maintenance will also ensure disaster and climate resiliency of the agriculture sector.”

“On the external front, domestic prices may be affected as global financial market conditions adjust in response to the faster monetary policy normalization in the United States,” Edillon said.

 

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