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Friday, June 05, 2009


Lower fuel and light prices helped push headline inflation for May to 3.3 percent, an 18-month low from 12.4 percent in August 2008, according to the National Economic and Development Authority.

"This is the lowest since November 2007," Socioeconomic Planning Secretary and NEDA Director-General Ralph G. Recto said in his memorandum to the President.

"With this, the average inflation rate is 5.8 percent for January to May, above the DBCC forecast of 2.5 to 4.5 percent for full year 2009 but with considerable downward momentum," Recto added.

He noted that compared to the previous year, fuel and light prices fell by 12.3 percent and 3.2 percent while compared to the previous month the same items dropped by 1.3 percent and 4.1 percent, respectively. Market data from the Department of Energy recorded that LPG prices went down to P22.90/kg from P23.15/kg in April while Meralco reports showed that it had reduced its power generation charges by P0.597 in May from P5.0205/kwh to P4.4235/kwh.
Meanwhile, Recto said there was also a slowdown in prices of food and non-food items which further contributed to lower inflation.

He said that prices of meat declined as those of pork were brought down by health concerns over the spread of swine flu and ebola viruses.

The prices of services, on the other hand, were flat compared to the previous month as recreational (-0.1%) and transportation and communication (-0.2%) services registered declines.

Taking out the effects of selected volatile items, core inflation likewise continued to slow down to 4.4 percent in May from 5.0 percent in the previous month.

Inflation for the National Capital Region (NCR) was recorded at 0.8 percent while that of Areas outside the NCR registered a 4.2-percent inflation rate.

"The inflation rate for NCR was relatively tame compared to AONCR. This was a reversal from April's month-on-month inflation during which NCR inflation was higher that in AONCR," Recto said.

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