Inflation eased to a four-month low of 6 percent in November from a nine-year high of 6.7 percent in October, on slower increases in food and fuel prices, the Philippine Statistics Authority said Wednesday.
The figure brought the average inflation rate in the first 11 months to 5.2 percent, still higher than the target range of 2 percent to 4 percent for the year.
Data from the PSA showed the November inflation was the slowest increase in consumer prices in four months, or since it settled at 5.7 percent in July 2018.
The PSA said there was a slowdown in the price indices of food and non-alcoholic beverages at 8 percent; housing, water, electricity, gas and other fuels, 4.2 percent; and communication, 0.4 percent.
Bangko Sentral Governor Nestor Espenilla Jr. said the November inflation was “very encouraging.”
“For the first time, we are seeing significant negative month-on-month growth after inflation plateaued at around 6.7 percent,” he said.
The PSA said month-on-month inflation declined 0.3 percent in November.
“It confirms that inflation is heading back to the 2 to 4 percent target range in response to decisive non-monetary measures to curb food prices as well as favorable recent developments in highly volatile international oil prices,” Espenillaa said in a message to reporters.
He said strong monetary action had significantly reinforced the anti-inflation process through the expectations route and a firmer peso.
“However, its more direct impact on economic activity will take a longer time to take hold. There is need to pay close attention to the core inflation trend which continue to rise through Nov. at 5.1 percent,” he said.
He said the monetary policy would need to stay vigilant to keep inflation under firm control amid expected strong economic growth.
The country’s economic managers, composed of the secretaries of the Department of Finance, Department of Budget and Management and National Economic and Development Authority, said the slowdown in inflation suggested the efficacy of anti-inflationary measures taken by the government and pointing to continuing reduction going forward.
“It is comforting for us that the slowdown will alleviate the struggles of poor Filipinos, especially now that the holiday season is just around the corner. This makes us even more determined in curbing inflation and enforcing all measures to guarantee food security,” the economic managers said in a joint statement.
Data showed that food and non-alcoholic beverages continued to be the main drivers of inflation. Last month, it decelerated to 8 percent from 9.4 percent in October 2018. This was significantly higher than the 3 percent in November 2017.
Food inflation slowed to 7.7 percent in November from the previous month’s 9.2 percent. This was caused by the improvement in the supply of key agricultural commodities such as rice, fish and seafood, meat, vegetables, corn and fruits.
“This is a positive development in the government’s commitment to manage inflation. But mitigating measures under various government issuances, including those prescribed in Administrative Order 13, issued by the president should be continuously implemented and strictly monitored. Most importantly, we must ensure the timely arrival of rice imports to compensate for the lost palay harvest in the third quarter of the year,” the economic managers said.
“With the recent passage of the Rice Tariffication bill in Congress, we expect rice prices to go down further still. But this measure, which opens the rice market to qualified players, should be coupled with the full operationalization of the National Window System to allow seamless imports processing and to avoid unwarranted delays,” they said.
They said the country should invest in farm mechanization and adopt the latest technology in crop management that includes the utilization of high-yielding and resilient crops. This will improve the productivity of the agriculture sector, which remains vulnerable to changing weather conditions.
“In the fisheries sector, we must also strengthen our sustainable coastal resource management efforts, as global fish production is seen to grow at a slower pace in the next ten years. In this regard, we call on the Department of Agriculture to fast-track the pending release of the Fisheries Administrative Order No. 259 to allow the importation of frozen fish and fishery aquatic products for wet markets during closed and off-season or during the occurrence of calamities,” they said.
They expressed optimism that inflation would stabilize further in the near term.