January 24, 2018, 9:18 am
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Dec inflation seen at 3.2%

The country’s inflation rate in December 2017 is expected to have moderated from the previous month, on the back of more stable food prices and lower power costs, the Department of Finance (DOF) said.

In its latest economic bulletin, the DOF said inflation in December of last year is seen to have moderated to 3.2 percent, down from the previous month’s 3.3 percent.

“Low inflation is an indication that the country’s macroeconomic fundamentals remain strong,” the DOF said.

“Solid fundamentals backed by TRAIN (Tax Reform for Acceleration and Inclusion Act) implementation, rice sector reform and the Build, build, build policy will push the country’s growth to 7 to 8 percent this year and sustain manageable inflation,” it added.

In November, lower food prices slowed inflation following four consecutive months of acceleration.

Inflation for food and non-alcoholic beverages eased to 3.2 percent in November 2017, lower than October’s 3.6 percent. This was the lowest rate recorded since October 2016. 

This can be attributed to lower prices of vegetables, sugar, jam, honey, chocolate and confectionery, fruits, oils and fats, and rice. 

Meanwhile, non-food inflation slightly increased to 3.3 percent in November 2017 from the previous month’s 3.2 percent. 

“Over the near term, we still expect risks coming from both domestic and external fronts,” Ernesto Pernia, socioeconomic planning secretary, earlier said. 

On the external front, he said higher international crude oil prices is anticipated following oil production cuts from the Organization of the Petroleum Exporting Countries until end 2018. 

On the domestic front, higher electricity rates and increasing coal and domestic fuel prices will also continue to exert pressures on headline inflation in the near term. 

“Overall, however, the inflation outlook for full year 2017 remains supportive of the current economic growth momentum of the country,” Pernia said. 
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