Following the National Statistics Office’s latest data, which said that the headline inflation rate has slipped from 3.8% in August to 3.6% in September, the National Economic and Development Authority (NEDA) also said in a statement that it “expects that the full-year headline inflation rate for 2012 will be at the low end of the government’s target.”
Dr. Rosemarie Edillon of NEDA-National Planning and Policy Staff claimed that, “The September data brought the headline inflation rate for the first three quarters of the year to only 3.2 percent, which is near the low end of the government’s target of 3.0 to 5.0 percent.”
While there are many factors affecting overall prices of goods and services, Dr. Edillon pointed out the influential factors that have dragged down the headline inflation rate for September 2012.
First is reduction in the prices of electricity. With the significant decline on charges collected by the Wholesale Electricity Spot Market (WESM) from the Manila Electric Company (MERALCO) this September, the latter incurred lower generation and transmission costs, thereby resulting to lower electric bills.
MERALCO’s generation charge for September, as a matter of fact, was at its lowest level since March this year, and recorded PHP1.34 per kilowatt hour (kWh) cutback from the data in August. WESM charges on the same month decreased from PHP14.70 per kWh in August to PHP8.74 per kWh in September.
Second is the decline in the prices of kerosene and unleaded gasoline. September 2012 prices for kerosene and unleaded gasoline decreased by 5.4% and 0.7% respectively, compared to the same period last year. But August 2012 recorded a higher drop in unleaded gasoline prices characterized by 1.7-percent change upon comparison with August 2011 data.
Third is minimal increases in the price of fish. Although inflation rate for food and non-alcoholic beverages was recorded at 3.7% in September 2012, faster than the 3.3% inflation in the previous month, the inflation for fish prices in September was minimal at 6.8%, compared to 7.3% in August.
Dr. Edillon further said that, “Headline inflation in Indonesia declined in September 2012 and recorded the lowest rate for the same month since 2007. This was attributed to slower upticks in food inflation observed during the period. Other ASEAN countries where inflation declined were Singapore and Malaysia. On the other hand, Thailand’s headline inflation rose to its highest level since the first quarter of this year.”
Apparently, the Philippine headline inflation rate for September 2012 is in consonance with some Southeast Asian countries such as Indonesia, Malaysia, and Singapore which recorded 4.31%, 1.4%, and 3.9% headline inflation rates respectively. Meanwhile, Thailand’s headline inflation in the same period was at 3.38%.
According to NEDA, “Headline inflation rate is the percent change in the average prices of goods and services commonly purchased by households, as measured by the Consumer Price Index.”