April inflation reached over 5-year high of 4.5%

INFLATION rate in April further accelerated to a more than five-year high of 4.5 percent from 4.3 percent in March using the new 2012 index, due mainly to faster price increases in alcoholic beverages and tobacco or the so-called “sin products,” the Philippine Statistics Authority said Friday.

Data showed the April inflation was significantly faster than 3.2 percent in the same month a year ago. It was the fastest monthly inflation data using the 2012 index. 

The April figure brought inflation in the first four months to 4.1 percent, breaching the upper limit of the government’s target range of 2 percent to 4 percent for the whole year.

“The uptrend can be attributed to higher annual increments recorded in the indices of the following commodity groups: alcoholic beverages and tobacco, 20 percent; clothing and footwear, 2.2 percent; housing, water, electricity, gas and other fuels, 3 percent; furnishing, household equipment and routine maintenance of the house,” the PSA said.

Other indices that contributed to the faster inflation in April were health, 2.8 percent; transport, 49 percent; recreation and culture, 1.5 percent; and restaurant and miscellaneous goods and services, 3.4 percent.

Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr. said the actual data was on the high side of the regulator’s forecast for the month of 3.9 percent to 4.7 percent.

“At the same time, we note the deceleration of the seasonally adjusted month-on-month inflation. These are relevant factors to consider at the policy review next week in determining the necessity and shape of a measured response to halt potential build-up in inflationary expectations,” Espenilla said.

He said such expectations “seemed to be feeding off essentially cost-push price pressures that may be transitory in nature.”

The April inflation matched the earlier estimate of the Department of Finance, which said inflation in April likely accelerated to 4.5 percent from 4.3 percent in March using the 2012 price index, driven mainly by uptick of food and sin products.

“... Sin products continue to drive inflationary pressure. Of the 4.5-percent forecast inflation rate for April, sin products account for as much as 0.5 percentage point (despite contributing only 1.6 percent to the CPI), much higher than their contribution of only 0.16 percentage point in the same month last year,” the DoF said.

Bangko Sentral ng Pilipinas deputy governor Guinigundo said at the sidelines of the 51st Annual Meeting of the Asian Development Bank in Mandaluyong City that all pertinent data—including inflation—would be considered by the monetary authorities when they meet at the Monetary Board meeting next week.

“Let us see on May 4 what is going to come up of PSA (Philippine Statistics Authority),” Guinigundo said, referring to the scheduled release of inflation data for the month of April.

“If it is higher than 4.3 percent, then it means something. If it is lower than 4.3 percent, 4.2, 4.1, then we have to reassess all the numbers. You know our position here, we keep on monitoring those numbers. We don’t just focus on what we see today but you have to look at it at a medium term perspective especially with respect to the medium term,” Guinigundo said.

Topics: Philippine Statistics Authority , Bangko Sentral ng Pilipinas , Nestor Espenilla Jr , Department of Finance ,
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