Jan inflation slows to 10-month low

ABS-CBN News

Posted at Feb 05 2009 10:17 AM | Updated as of Feb 06 2009 08:16 PM

Philippine inflation eased to 7.1 percent in January, the lowest level in 10 months, as economic activity slowed amid the global financial crisis, the government said Thursday.

The January figure was higher than the market estimate of 7.0 percent in a Reuters poll, but at the low end of the central bank's official forecast of 7.0 to 9.0 percent.

Prices grew by a slower pace than the 8.0 percent rate in December and extended a downtrend that started in September, National Statistics Office data show.

Food and fuel items made the most significant impact in its consumer price index basket.

Meanwhile, core inflation, which strips out some volatile food and energy items, edged down to an annual 6.9 percent in January from 7.3 percent in December.

Anticipating the decline, the central bank has cut its key interest rates by a total of one percentage point over the past two months to loosen credit and stimulate economic activity even as businesses cut more than 15,000 jobs amid depressed global demand for Filipino exports.

Central bank governor Armando Tetangco suggested Thursday that there was further room for manoeuvre on monetary policy.

"This confirms our expectation for continued slowdown in price increases and gives the (central bank) more room to support the economy," he said in a text message to reporters. With AFP, Reuters