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Philippine inflation remains at 3.4 pct in April

Xinhua, May 5, 2017 Adjust font size:

Inflation rate in the Philippines in April stood at 3.4 percent, the same as previous month due to slower price adjustment in electricity and gas and slightly higher prices of food commodities, the government said on Friday.

The National Economic and Development Authority (NEDA) said the inflation rate was slightly below the median market expectation of 3.5 percent and remained within the government's target of 2.0 to 4.0 percent for 2017.

"The stable inflation rate in April is a respite from the upward inflation trend we saw in the first three months of the year," said NEDA Undersecretary for Investment Programing Rolando Tungpalan.

Nevertheless, he said "volatilities in oil prices and erratic exchange rates can still manifest into higher domestic prices for both food and non-food commodities."

NEDA said inflation in the non-food group decelerated from 2.8 percent in March to 2.7 percent in April 2017 due to the sluggish price adjustments of electricity, gas, and other fuels. The resumption of operations of the Malampaya Gas Field after a two-month maintenance shutdown from January to February held in easing of prices in this sector, it said.

Moreover, the agency said lower pump prices recorded for unleaded gasoline, diesel kerosene, and liquid petroleum gas (LPG) in April 2017 contributed to slower non-food inflation.

The agency recorded a slightly higher inflation in the food and non-alcoholic beverage group which accelerated from 4.0 percent in March to 4.2 percent in April 2017. The prices of fruits, vegetables, sugar, jam, honey, chocolate, and confectionery tempered the increase in food inflation, it said.

However, it said prices of staples such as rice, meat, and fish remained high due to supply constraints.

"Data from the Philippines Statistics Authority (PSA) showed the country's declining inventory of commercial and National Food Authority rice," NEDA said.

Tungpalan predicted "possible increases in transportation fares and electricity rates in the coming months could also exert upward pressure on prices, along with the transitory impact of the proposed tax reform program."

Tungpalan said that normal rainfall pattern and neutral weather conditions until August this year bodes well for the crops sector.

"With the potential recurrence of El Nino, the government should start taking precautionary actions to mitigate the damaging effects of droughts and dry spells. These include production support, distribution of seeds, and timely importation," Tungpalan said. Endit