MANILA, Philippines (UPDATE) – The country’s annual inflation in December picked up slightly to hit 4.1 percent, its highest since December 2011, with food and utilities leading price increases, the National Economic and Development Authority (NEDA) said on Tuesday.
Economic Planning Secretary Arsenio Balisacan attributed the increase to the devastation of typhoon “Yolanda” in November.
"Almost all food items in the average consumer basket increased, which can be mainly attributed to the impact of Typhoon Yolanda (Haiyan) that hit the central Philippines in November 2013," he said in a statement.
NEDA said food prices jumped 5 percent in December 2013 from 4 percent in November, due to price increases of rice (9.2 percent from 8.1 percent), vegetables (9.8 percent from 5.4 percent), meat (2.3 percent from 2.2 percent), fish (3.3 percent from 3.1 percent), and fruits (4.3 percent from 3.9 percent), among others.
"Some food items even reached double-digit inflation in the areas hardest hit by the typhoon," said Balisacan.
In Eastern Visayas, prices of vegetables increased by 11.3 percent in December 2013 from 5.8 percent of November 2013 while in Central Visayas, prices of rice increased by 12.2 percent from 9.4 percent, 11.2 percent from 7.8 percent for fruits, and 11.3 percent from 6.6 percent for vegetables.
NEDA said the jump in power rates and domestic prices of petroleum products also contributed significantly to the acceleration of the country’s overall inflation in December 2013.
"This is while the peso depreciated further by 7.6 percent in December 2013 from 5.9 percent in the previous month," Balisacan added.
The consumer price index in December rose 4.1 percent from a year earlier, above the 3.9 percent consensus estimate in a Reuters poll, and near the low end of the central bank's forecast range of 3.8 to 4.7 percent for the month.
Average inflation for the year was at 3.0 percent, at the low end of the central bank's 3-5 percent target for 2013.
"Moreover, relative to the previous months, food prices are usually higher in December due to the festive season,” Balisacan said.
Despite higher inflation, analysts expect the central bank to keep its key policy rate steady at a record low of 3.5 percent at its meeting on Feb. 6. -- With a report from Reuters