The Department of Finance (DOF) sees the inflation rate remaining at a manageable level in the short term at the least after increases in consumer prices eased to 3.3 percent in November from a peak of 3.5 percent a month ago.
This brought the average inflation in the first 11 months to 3.2 percent, slightly higher than the midpoint of the target range of 2 to 4 percent this year.
In an economic bulletin on inflation, DOF Undersecretary Gil Beltran said the average of 3.2 percent from January to November was well within the target range of the government.
“Core inflation of 3.3 percent suggests that in the foreseeable short-term, inflation will be manageable,” said Beltran, who is the DOFs chief economist.
DOF data showed that price increases in food and non-alcoholic beverages for November eased to 3.2 percent from 3.6 percent the month before.
Other commodity groups that recorded lower price increases were rice, 1.0 percent from 1.1 percent; alcoholic beverages and tobacco, 6.1 percent from 6.8 percent; clothing and footwear, 1.8 percent from 1.9 percent; and education, 2.2 percent from 2.3 percent.
The commodity groups that posted higher price increases were housing, utilities and fuels, 4.2 percent from 4 percent; electricity, gas and other fuels, 9.7 percent from 9.1 percent; transport, 4.4 percent from 4.2 percent; recreation and culture, 1.6 percent from 1.5 percent; and restaurants and miscellaneous services, 2.9 percent from 2.6 percent.
Meanwhile, the commodity groups that maintained their level of price increases for the month of November were furnishings and household equipment, 1.8 percent; health, 2.2 percent; and communication, 0.4 percent.
Electricity rate per kilowatt hour for households consuming 200 kW in November increased to P9.63 from P9.28 a month ago. Also, the price of diesel per liter in the National Capital Region increased to P35.46 from P34.51 a month ago. Gasoline also increased to P48.48 from P46.89 in October.
Earlier, the DOF projected that inflation rate in November slowed to 3.2 percent from its intra-year high of 3.5 percent last October owing mainly to more stable food prices after the previous month’s weather disturbance.
In an economic bulletin, the DOF said the stable prices of food might offset the faster increases in the prices of fuel and power rates for the month.
Despite the expected faster price increases, the DOF remained optimistic that the country’s strong fundamentals, as shown in the manageable inflation levels, would help sustain rapid growth and investment in the country.
“Adequate supply of goods from higher production will further dampen inflation rise in the future. This will likewise temper the rise in interest rates despite the ongoing Fed tightening,” the DOF said.
Inflation in October 2017 accelerated to 3.5 percent from 3.4 percent a month ago, the fastest in almost three years, driven mainly by higher annual increases in the prices of alcoholic beverages and tobacco, utilities and fuel products.
This brought the average inflation in the first 10 months to 3.1 percent, slightly higher than the midpoint of the government’s official target range of 2 to 4 percent this year.
The October inflation was the fastest since the 3.7 percent recorded in November 2014, confirming the earlier projection of the DOF that consumer prices likely peaked for the month.