PHILIPPINE inflation slightly climbed to 2.5 percent from 2.3 percent in the previous month, due to the increase in the prices of major non-food commodities, the National Economic and Development Authority (NEDA) said Tuesday.
NEDA director general and Socioeconomic Planning Secretary Ernesto Pernia said the rise in inflation can be attributed to the increase in domestic prices of petrol products, which comprise the bulk of the non-food commodity basket usually purchased by the average Filipino household.
Non-food inflation increased due to the uptick of prices in all major non-food items such as housing, water, electricity, gas and other fuels (1.3% from 0.9 percent), and transport (0.5% from 0.2%).
On the other hand, food inflation remained unchanged in November 2016 at 3.5 percent, with rice prices breaking its five-month long increasing trend and corn prices continuing in its downward trend since August.
“The decrease in rice prices signals the recovery of the rice sector from the devastation of typhoons Karen and Lawin. We must foster technological advances in agriculture to decrease the susceptibility of our crops to natural calamities,” said Pernia.
Meanwhile, the lifting of the Philippines’ Quantitative Restrictions for rice imports by July 2017 is expected to decrease prices of well-milled rice by P7.00 and farm gate price by P5.00.
“We must help our rice farmers prepare for this and help them transition to higher value crops as we ensure food security and make basic prices more affordable to the poor,” said Pernia.
“Overall we expect the full year inflation for 2016 to be well within the government’s inflation target band of 2-4 percent. The overall balance of risks is tilted on the upside, with supply-side factors as the main contributor to price adjustments,” Pernia added.
He explained that international and domestic risks are tilted upward from a possible rally in oil prices, depreciation of the peso against the US dollar, and pending petitions for electricity rate increases. (SDR/Sunnex)