April inflation at 4.5%

The PSA data showed reductions in commercial and municipal fisheries’ outputs of 6.89 percent and 1.05 percent, respectively, weighed down aggregate fisheries production in 2017. (PHOTO: Philippine Statistics Authority/Facebook)

MANILA — The consumer price index in April this year further accelerated to 4.5 percent, faster than inflation in March of 4.3 percent and markedly more than April 2017’s 3.2 percent.

The Philippine Statistics Authority (PSA) reported Friday that higher price pressure last month can be attributed to increasing annual increments in the indices of commodity groups led by “sin products” — alcoholic beverages and tobacco — at 20 percent.

Other commodity groups that contributed to higher inflation rate in April were transport at 4.9 percent; restaurant and miscellaneous goods and services at 3.4 percent; housing, water, electricity, gas, and other fuels at 3 percent; furnishing, household equipment and routine maintenance of the house at 2.8 percent; health at 2.8 percent; clothing and footwear at 2.2 percent; and recreation and culture at 1.5 percent.

On the other hand, PSA data showed that inflationary pressure on food eased to 5.5 percent in April 2018 from 5.7 percent in April 2017.

“The April actual data is on the high side of our forecast of the month. At the same time, we note the deceleration of the seasonally adjusted month-on-month inflation,” Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr. told reporters in a text message.

The central bank made a “slight upward revision” of its inflation outlook early this week, forecasting inflation to range at 3.9 to 4.7 percent.

“These are relevant factors to consider at the policy review next week in determining the necessity and shape of a measured response to halt potential build up in inflationary expectations. Such expectations seem to be feeding off essentially cost-push price pressures that may be transitory in nature,” Espenilla said.

Meanwhile, Asian Development Bank (ADB) Director General for Southeast Asia Department Ramesh Subramaniam stated that the institution does not consider the current inflation level as a serious concern that may curtail the country’s economic growth this year.

“If you compared the Philippines with couple of other countries in ASEAN, they also have the similar inflation levels,” Subramaniam said in a media briefing here at the 51st Annual ADB Meeting.

“We do not take this as a serious issue,” he noted.

“Part of it is demand is growing. That’s why, in relation with inflation, [it] is also growing. One builder is the Build Build Build Program. Because of infrastructure expansion, they lead to multiplier effects that has impact on inflation,” Subramaniam explained.