MANILA (3rd UPDATE) — Inflation fell for the 3rd straight month in April due to slower price movements of select food and non-alcoholic beverages, the state statistics bureau said on Friday.
The consumer price index climbed 6.6 percent, which was slower than the 7.6 percent recorded last March, according to the data from the Philippine Statistics Authority.
According to the PSA, the downtrend was attributed to the lower inflation rate of 7.9 percent of food and non-alcoholic beverages from 9.3 percent in March.
Transport inflation also slowed to 2.6 percent in April from 5.3 percent, while housing, water, electricity, gas and other fuels also contributed to the decline with inflation at 6.5 percent from 7.6 percent, data showed.
April's inflation rate is within the Bangko Sentral ng Pilipinas' 6.3 to 7.1 percent estimate. However, it remains above the government's 2 to 4 percent target range.
"With these developments, NEDA is optimistic that the downward trend will continue and settle further within the government’s outlook," said NEDA Secretary Arsenio Balisacan.
Core inflation slightly declined to 7.9 percent in April from 8 percent the previous month. Average inflation for the January to April period, meanwhile, was at 7.9 percent.
Balisacan said it was crucial to design policies that are geared towards protecting the purchasing power as potential wage increases, transport fare hike, and food supply pressures remain as risks to inflation.
When asked if inflation was likely to continue slowing down in the next few months, National Statistician Dennis Mapa said, “May mga threats pa tayo (we still have threats) like El Niño, which has possible impact on our food prices.”
“Given the current weather situation meron tayong El Niño, nagkakaroon siya ng threat sa food commodities natin. We are tracking this, both on the production side…and retail price,” Mapa said.
UP School of Economics Assistant Professor Jan Carlo Punongbayan said although this was good news, core inflation remained high.
“This is the biggest decline in inflation that we have seen in the past couple of months,” Punongbayan told ANC.
“However, core inflation is still quite high. We’re in a rather weird situation wherein the core inflation rate is higher than the headline inflation rate. This rarely happens. This may point the fact that inflation these days is more demand driven rather than supply driven,” he said.
Although the Development Budget Coordination Committee kept its economic growth target of 6 to 7 percent in 2023, it increased its inflation projection for the year to 5 to 7 percent from its earlier estimate of 2.5 to 4.5 percent.
The BSP said month-on-month inflation could revert to within 2 to 4 percent later this year, but the annual average inflation is not likely to settle within the target range until next year.
The central bank said the April outturn is "consistent with the overall assessment that inflation will remain elevated over the near term before gradually decelerating back to target range towards end-2023."