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Philippine inflation up to 2.6 pct in December

Xinhua, January 5, 2017 Adjust font size:

Philippine inflation increased to 2.6 percent in December, bringing the average full-year 2016 inflation to 1.8 percent, the National Economic and Development Authority (NEDA) said Thursday.

Inflation in November was at 2.5 percent.

"The uptick in inflation last month was caused by price increases partly due to the holiday season and supply constraints on some food items," said Socioeconomic Planning Secretary Ernesto M. Pernia, also NEDA director general.

The full-year 2016 inflation of 1.8 percent is below the government's target range of 2.0 to 4.0 percent for the year, but higher than the 1.4 percent of 2015, he said.

Excluding selected food and energy items, core inflation increased 2.5 percent in December, the Philippine Statistics Authority said.

Pernia said for 2017 and 2018, the government expects inflation to be within the target range of 2.0 to 4.0 percent. This already considers the scenario of higher oil prices, pending petitions for adjustments in electricity rates, but especially, strong domestic economic activity.

"The inflation outlook is supported by the country's brisk domestic demand conditions, buoyed by solid private household spending, higher government expenditure, and adequate domestic liquidity," said Pernia.

The damage to rice resulting from three typhoons could also lead to faster inflation in early 2017, he said, noting that rice comprises a sizable portion of the Consumer Price Index basket.

"The volatility in rice prices could affect the overall welfare of the Filipino families, particularly the poor who spend around 20 percent of their incomes on rice. Therefore, the government needs to promote more resilient practices for rice production to minimize the impacts of climate-related shocks," he said. Endit