Dock workers unload part of the 2,160 bags of Vietnamese rice on Thursday at the Eva Macapagal Port in Pier 15 in Manila. The shipment is part of the 500,000 metric tons scheduled for importation from Vietnam that will add to the country's stockpile.  (MNS photo)

Dock workers unload part of the 2,160 bags of Vietnamese rice on Thursday at the Eva Macapagal Port in Pier 15 in Manila. The shipment is part of the 500,000 metric tons scheduled for importation from Vietnam that will add to the country’s stockpile. (MNS photo)

MANILA, May 5 (Mabuhay) — Lower prices of food, fuel and electricity brought the headline inflation down to 2.2 percent in April from 2.4 percent in March and from 4.1 percent in April 2014, the National Economic and Development Authority (NEDA) reported on Tuesday.

The four-month average settled at 2.3 percent, the Cabinet-level NEDA said, citing the latest inflation numbers from the Philippine Statistics Authority (PSA).

“Low and stable inflation in January to April 2015, which averaged at 2.3 percent, bodes well for consumption growth. It is also within the Development Budget Coordination Committee’s inflation target range of 2.0 to 4.0 percent,” said NEDA Officer in Charge (OIC) and Deputy Director-General Emmanuel F. Esguerra.

A moderate inflation of 4.0 percent from 4.4 percent in the food subgroup lingered in April, putting a drag on headline inflation, according to the PSA. “The slowdown in food inflation can be attributed to slower price adjustments in rice, meat, and fruits.”

Non-food inflation also slackened in April on the heels of rollbacks in gas, electricity and other fuels. The rollback in domestic petroleum prices continued following a sharp decline in international oil prices since the last quarter of 2014, NEDA reported.

Core inflation, which excludes selected volatile food and energy prices, also fell to 2.5 percent last month from 2.7 percent in March 2015 and 2.9 percent in April 2014.

“Core inflation in the first four months of 2015 averaged at 2.5 percent,” NEDA said.

Stable peso

Inflation in the National Capital Region (NCR) slowed down to 1.5 percent in April from 1.9 percent in March 2015 and 3.3 percent in the same period a year ago.

“This is accounted for by slower inflation in several major commodity groups including food and non-alcoholic beverages,” according to NEDA.

PSA data shows inflation outside NCR slipped to 2.3 percent in April from 2.6 percent in March and 4.4 percent in April 2014.

“The peso is expected to remain relatively stable given the country’s strong external position owing to strong remittances and foreign direct investment inflows, ample international reserves, and a manageable level of external debt,” Overall, these conditions are seen to contribute to stable domestic prices going forward,” Esguerra said.

But the NEDA official noted potential risks to inflation in the coming months, particularly the current episode of a mild El Niño – should its adverse effects intensify.

The situation must be monitored regularly to ensure that appropriate policy actions are implemented without delay in response to the incidence of drought in agriculture areas, Esguerra said.

“Timely importation of rice to augment domestic supply should serve as a ready measure to prevent the repeat of the high rice prices witnessed in the third quarter of 2013 until 2014,” he said.

He emphasized the critical issue of finding a lasting solution to decongest Metro Manila as a way of heading off disruptions in the domestic supply chain, especially when it comes to promoting higher productivity in agriculture and food processing.

“There should be programs to cover the use of appropriate technology to expand production capacity as well as intensification of credit programs and facilities with crop insurance,” Esguerra said. (MNS)