MANILA – The National Economic and Development Authority (NEDA) on Tuesday said the 4.1 percent inflation rate registered in April is still manageable and is within the government’s target for the year.
"In the absence of major economic shocks, NEDA expects the country's headline inflation rate in 2014 to average around 4.0 percent. This is within the government's target of 3 to 5 percent as set by the NEDA Board-Development Budget Coordination Committee (DBCC)," Economic Planning Secretary Arsenio Balisacan said in a press statement.
Balisacan said that despite concerns on the sustainability of growth in emerging economies, the country's economic activity will remain strong.
“Our economic activity will go forward, supported by sound macroeconomic fundamentals, favorable consumer and business sentiment, and manageable inflation," he said.
The 4.1 percent inflation rate last month was caused by higher food and utility costs.
"Tightness in the country's rice supply persisted last month, resulting in higher prices of rice during the period. Similarly, the relatively higher corn prices may be attributed to lower production of corn resulting from dry spells in a number of corn-producing regions," Balisacan said,
He added that rising crude prices in the world market hiked prices of domestic petroleum products.
"The domestic prices of unleaded gasoline, diesel, kerosene and LPG recorded faster adjustments last month. These are also consistent with the Dubai crude price, which increased by 3 percent in April 2014, coming from a 1.2-percent annual contraction in the previous month," said Balisacan.
Balisacan said the government should focus on improving inventory management and distribution systems in the short term to address upside risks in inflation.
“In the medium term, we need to focus on increasing the productivity of agriculture and the food processing industries as well as expanding production capacity," he added.