2013 Average Inflation is within Government Target

Manila—(PHStocks)—Bangko Sentral ng Pilipines (BSP)—Year-on-year headline inflation for the whole year of 2013 averaged 3%, within the Government’s inflation target range of 4% ± 1.0 percentage point for the year. This is the fifth consecutive year that the average inflation rate has been within the announced government target.

Inflation in December rose further to 4.1% from 3.3% in November, and was likewise within the BSP’s forecast of 3.8-4.7% for the month. Similarly, core inflation—which excludes certain food and energy items to measure generalized price pressures—increased to 3.2% in December from 2.8% in the previous month. Month-on-month headline inflation was higher at 0.7% from 0.4% in November.

The uptick in headline inflation in December was driven largely by higher prices of food, electricity, and domestic petroleum products. Food inflation went up as prices of key food items, particularly rice, meat, fish, milk, fruits, and vegetables rose due to holiday season demand coupled with tight domestic supply conditions. Likewise, the upward adjustment in electricity rates as a result of the scheduled maintenance shutdown of the Malampaya natural gas facility as well as the higher gasoline, diesel, LPG, and kerosene prices contributed to the increase in non-food inflation for the month.

Governor Amando M. Tetangco, Jr. said that the December inflation reading continues to support the BSP’s assessment of a manageable inflation environment over the policy horizon and affirms the appropriateness of the current monetary policy stance. Looking ahead, the BSP will remain vigilant in monitoring possible price pressures and stands ready to deploy appropriate measures as needed to ensure price stability conducive to a balanced and sustainable economic growth.