Philippine Inflation of November 2012 slips down 2.8% - Commodity prices increased?

Slower increase in prices was observed in major food items such as fish (5.9% in November 2012 from 6.0% in October 2012), milk, cheese, and eggs (3.3% from 3.4%), and fruits (4.9% from 5.2%). This was also coupled with the decline in prices of vegetables (-5.3% from -0.1%), and oils and fats (-4.9% from -4.5%).

November Inflation Eases To 2.8%

Ample supply of food and fishery products and lower prices of domestic petroleum have helped slow down the inflation rate to 2.8 percent in November compared to 3.1 percent in the previous month.

"The abundant supply of agriculture and fishery products in November 2012 resulted in greater annual reductions in the prices of various food items compared to the previous month," said NEDA Officer-in-Charge (OIC) Rolando Tungpalan.

The Bangko Sentral ng Pilipinas, meanwhile, said that the low consumer prices in November suggest its "current policy stance is still appropriate."

"[Slowing inflation] and improved domestic demand conditions support the view that policy settings remain appropriate for the time being," Bangko Sentral ng Pilipinas Gov. Amando Tetangco said in a text message.

"That said, we continue to monitor the impact of the cumulative 100 basis point cut [in interest rates] on credit demand and liquidity growth to see if these are still in line with domestic absorptive capacity," Mr. Tetangco added, referring to the full percentage point of cuts introduced under the central bank's easing drive.

Overnight interest rates are now at a record low of 3.50% for borrowing and 5.50% for lending.

The central bank will hold its last policy review meeting for the year on Dec. 13.

The November inflation print was the slowest since June's 2.8%.

The BSP projected the consumer price index to rise 2.7%-3.6% in November from a year earlier.

November CPI was up 0.1%, after it fell 0.1% in October.  Inflation averaged 3.2% in the January-November period, still within the central bank's 3%-5% full-year target.

Slower increase in prices was observed in major food items such as fish (5.9% in November 2012 from 6.0% in October 2012), milk, cheese, and eggs (3.3% from 3.4%), and fruits (4.9% from 5.2%). This was also coupled with the decline in prices of vegetables (-5.3% from -0.1%), and oils and fats (-4.9% from -4.5%).

"Slower increases of prices in electricity, gas and other fuels were also observed in November 2012 due to the contraction in Manila Electric Company's (MERALCO) generation charge and the lower prices of kerosene and diesel," said Tungpalan.

MERALCO's generation charge in November 2012 was lower by 2.7 percent (P0.16/kWh) against the same period in 2011 due to lower generation costs from suppliers.

Prices of kerosene also slowed down, falling by 2.5 percent in November 2012 from an increase of 3.5 percent in October 2012. Furthermore, diesel prices fell by 4.6 percent from 3.1 percent.

"These were due to the trimmed trading price of Dubai crude in the international market, which contracted by 1.6 percent from a 4.8 percent growth in October 2012," said Tungpalan.

November 2012's record for consumer prices brings the year-to-date headline inflation to a stable rate of 3.2 percent.

"The average inflation from January to November 2012 remains within the Development Budget Coordination Committee's target range of 3.0 to 5.0 percent for 2012," Tungpalan said.

Core inflation likewise decelerated for the month of November 2012 to 3.4 percent against 3.6 percent recorded in the previous month or 4.5 percent in November 2011.

"The lower core inflation implies an easing of demand pressures on consumer prices. With the continued benign price increases for the period, we are expecting that inflation should be manageable for the rest of the year," the NEDA official said.

Inflation rate in Metro Manila also eased to 2.6 percent in November 2012 from 2.9 percent in October 2012. Similarly, the inflation rate outside the capital slowed in November 2012 to 2.9 percent from the previous month's 3.3 percent.

From January to November 2012, the year-to-date inflation in Metro Manila stood at 2.9 percent, slower than the average movement of prices outside Metro Manila, which is at 3.3 percent. (EHL)  (

Manila Bulletin 

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