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By ADRIAN STEWART CO
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Thursday, March 9, 2017
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MANILA – The National Economic and Development Authority (NEDA) on Tuesday said inflation for the month of February increased to 3.3 percent from 2.7 percent in the previous month.
In a press statement, Socioeconomic Planning Secretary Ernesto M. Pernia said the increase in the inflation was due to upward price changes in both food and non-food items.
“The inflation outlook for 2017 remains within the government’s target of 2 to 4 percent However, risks to the inflation outlook appear to be tilted to the upside. This could drive inflation towards the higher end of the target,” Pernia said.
Pernia also noted that the quick price increases in rice, meat, fish, and vegetables pushed up the food subgroup inflation to 4.3 percent in February 2017 from 3.6 percent in January.
The country’s temporary ban on poultry imports from South Korea, Germany, France, Netherlands, Czech Republic, and Kuwait in response to the Avian Flu outbreak may have contributed to the limited supply of meat products.
The higher rice prices in the country can be credited to lower rice stock inventories. The stock inventories decreased by 17.9 percent in January 2017 to December 2016 due to the contraction in palay production in the fourth quarter last year.
The price increases of housing, water, electricity, gas, and other fuels forced the non-food subgroup inflation to spike up to 2.5 percent in February 2017 from last month’s 2 percent.
Pernia narrated the risk of inflation from outside includes the price of oil, the depreciation of peso and effect of the National Food Authority’s memorandum that allowed the entry of rice imports under the minimum access volume program only.
“The risks to inflation that we see include increase in the price of oil and the depreciation of peso,” said Pernia. “While the NFA memorandum (from October 2016 until Feb. 28, 2017) will tighten the rice supply, which translates to higher food prices.”
Within the region, all the ASEAN-5 economies except Thailand experienced faster inflation rates in the first two months of 2017, which coincides with the rising oil prices in the international market./PN
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