Inflation rate climbed to 1.6 percent in May, the fastest in 12 months, from 1.1 percent in April, amid higher demand for food and other products during the election period, the Philippine Statistics Authority said Tuesday.
“The increase in inflation can be attributed to higher demand due to election spending and partly to supply constraints in agriculture because of the residual effects of the weakening El Niño,” said Economic Planning Secretary Emmanuel Esguerra.
Data showed the May 2016 inflation was above the market expectation of 1.4 percent, but within Bangko Sentral ng Pilipinas’ forecast of 1.1 percent to 1.9 percent for the month.
Core inflation, which excludes volatile prices of energy and food, also increased to 1.6 percent in May from 1.5 percent in April.
“The outturn was within our forecast 1.1 to 1.9 percent and is consistent with our assessment that inflation will slowly rise to within our assessment that inflation will slowly rise to within the NG target range of 2 to 4 percent over the policy horizon,” Bangko Sentral Governor Amando Tetangco Jr. said in a text message to reporters.
“We will continue to monitor external developments including next Fed moves, and domestic developments such as changes in pump prices and utility rates to see if there is any need to adjust policy stance,” Tetangco said.
Esguerra said the manageable inflation rate for the first five months of 2016 was expected to continue for the rest of the year as the productive capacity of the domestic economy expanded and oil prices remained low.
“The stability in inflation rate will create a positive environment for investments and ensure affordability of basic commodities for the poor,” said Esguerra.
