Posted on 09 Jan 2008
Higher prices of food, oil and other essential items have pushed up the country's inflation rate to 3.9 percent in December from 3.2 percent in November.
The National Statistics Office (NSO) also attributed this to the increased annual inflation rates of beverages, tobacco, fuel, light and water (FLW) and services. The inflation in 2006 was 4.3 percent.
NSO said the average annual headline inflation rate in the
Socio-economic Planning Secretary Augusto Santos said significant upward adjustments in the prices of both food and nonfood items exerted pressure on the December 2007 inflation rate, as the year-on-year inflation rate for food inched by 5.0 percent, higher than the previous month's 4.0 percent.
"Last month's inflation was driven mainly by supply shocks, including higher oil prices, tight food supply and costlier power and other utilities," central bank governor Amando Tetangco said.
The central bank had forecast an inflation rate of between 3.2 and 3.7 percent for December while economists had expected inflation to come in at 3.2 to 3.5 percent.
The December figures brought the full-year inflation rate for 2007 to an average of 2.8 percent, down from 6.2 percent in 2006, the National Statistics Office said in a statement.
The 2007 average was well within the government's target of 4.0 to 5.0 percent for the whole year and the central bank said it was not troubled by the uptick in inflation in December.
"With average inflation of 2.8 percent (in 2007) versus 2006's 6.2 percent, we do not foresee a significant build-up in demand pressure," Tetangco said.
The higher rates during the period resulted from the price increments in the index of rice at 7.2 percent from 7.0 percent in November 2007, cereal preparations at 5.2 percent from 4.5 percent, dairy products at 8.5 percent from 7.5 percent, eggs at 7.7 percent from 7.5 percent, fish at 4.6 percent from 3.7 percent, fruits and vegetables at 7.5 percent from 1.7 percent, meat at 2.8 percent from 2.5 percent, and miscellaneous items at 2.9 percent from 2.7 percent.
The Bureau of Agricultural Statistics' (BAS) Weekly Price Monitor of agricultural products showed that prices of fish and vegetables went up in December due to lower supply in the wet market due to typhoons and the cold weather.
The increasing cost of non-oil commodities in the international market (i.e. flour and milk and milk products) and higher demand for meat during the holidays pushed prices of other food items in the basket.
Meanwhile, non-food items such as fuel (17.4 percent from 10.8 percent in November 2007) and transportation and communication (4.7 percent from 3.4 percent) also posted higher inflation rates as prices of oil in the international market continued to rise at unprecedented pace.
During the month, the average price of
Inflation rate in the National Capital Region (NCR) picked up to 3.5 percent in December from 2.6 percent in November due to the upward movements in the rates of food, beverage, tobacco, light, water and services. The annual average inflation in the area for 2007 was 2.6 percent compared to 7.0 percent posted a year ago.
Inflation rate in areas utside the National Capital Region (AONCR) further went up to 4.2 percent in December from 3.5 percent in November as higher rates were recorded in all the commodity groups except for clothing and housing and repairs (H&R).
Average inflation for 2007 at 2.8 percent was slower than the 6.0 percent in 2006.
Excluding selected food and energy items, core inflation picked up to 2.6 percent in December from 2.3 percent in November. The annual average core inflation rate was 2.8 percent in 2007, lower than the 5.5 percent in 2006.
