Inflation slows to 16-month low in April

Inflation continued to decelerate for the sixth consecutive month in April to mark the slowest pace in 16 months, according to data released by the Philippine Statistics Authority (PSA) on Tuesday.

According to the PSA, inflation clocked in at 3.0% last month, slower than the 4.5% registered in April 2017 and the 3.3% registered in March this year.

This is also the slowest since inflation was recorded at 2.9% in December 2017.

In a press conference in Quezon City, PSA Assistant Secretary Josie Perez said the deceleration came as lower prices were registered in at least six commodity groups.

"The main drivers in the downtrend of inflation in April 2019 were food and non-alcoholic beverages; alcoholic beveregaes and tobacco; and housing, water, electricity, gas, and other fuels," she said.

Slower annual increments were noted in the indices of food and non-alcoholic beverages (3.0%), alcoholic beverages (9.9%), clothing and footwear (2.4%), housing, water, electricity (3.2%), health (3.7%), and restaurant and miscellaneous goods (3.5%).

In terms of area, inflation in the National Capital Region (NCR) was registered at 3.1%, slower than the 3.2% in March and the 5.2% in April 2018.

In areas outside the NCR (AONCR), inflation continued to move slower at 3.0%, which compares with the 3.4% in March and the 4.3% in April 2018.

"The highest annual rate among the regions in areas outside NCR remained in MIMAROPA Region at 4.6% in April 2019," said Perez.

"Meanwhile, the lowest inflation among the regions in areas outside NCR in April 2019 was recorded in Region 7 or Central Visayas at 1.3%," she added.

The latest figures were in line with the Bangko Sentral ng Pilipinas (BSP) forecast range of 2.7 to 3.5%, and the 3.0 to 4.0% outlook of the Development Budget Coordination Committee (DBCC).

The recent inflation reading validates our efforts towards stabilizing inflation so that the country's buoyant economic growth, along with key reforms, remains unimpeded," Socioeconomic Planning Secretary Ernesto Pernia said in a separate statement.

Looking ahead, Pernia said inflation could continue to decelerate given the passage of the Rice Liberalization Act, which officially removed the quantitative restrictions on rice importation, that took effect March 5.

"The continued low inflation of rice can be attributed to the stable rice supply in the country, with more imported rice expected to arrive in the country as the Rice Liberalization Act takes effect," he explained.

For its part, the BSP said the recent figures affirmed the disinflationary trend, but warned that several factors still remain upside risks to inflation.

"This is very encouraging as it confirms the BSP's view that year-to-date average inflation will finally settle at around the midpoint of the 2-4% target by around the third quarter of 2019," BSP Deputy Governor Diwa Guinigundo said in a separate text message.

"We continue to keep our ears on the ground because of the upside risks to inflation including the prolonged El Niño phenomenon and the elevated oil prices," he explained.

The damage and production losses incurred by the agriculture sector due to El Niño has reached almost P8 billion as of late April, according to the National Disaster Risk Reduction and Management Council (NDRRMC).

"These will all be considered in the May 9 monetary policy meeting of the Monetary Board," said Guinigundo. — KBK/RSJ, GMA News