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Tuesday, July 07, 2009


The headline inflation for June this year sharply dropped to 1.5 percent from its year-ago level of 11.4 percent and month-ago level of 3.3 percent. "Rice, corn, fuel and electricity in June were generally less expensive compared to the same month last year. This contributed significantly to lower inflation in the said period," Socioeconomic Planning Secretary and NEDA Director General Ralph G. Recto said in his memorandum to the President.

The core inflation likewise declined to 3.9 percent in June from 4.4 percent in May.

Average inflation for the first half of 2009 settled at 5.0 percent. This is slightly above the DBCC forecast of 2.5 to 4.5 percent for this year.

The NEDA chief cited data from the Bureau of Agricultural Statistics (BAS) that showed lower prices of rice. The prices of premium, well-milled, and regular rice declined by 7.7 percent, 10.0 percent, and 12.3 percent, respectively.

Meanwhile, data from the National Statistics Office (NSO) showed corn prices dropped by 2.1 percent over the comparative period.

"This declining trend in food prices was also observed by the World Bank as the general fall in world demand took its toll on international commodity markets," Recto said. He added that in particular, maize prices declined from $287 per metric ton (mt) in June last year to $179.5/mt in June 2009, and imported Thai rice (5% broken) prices fell from $775.3/mt to $572.0/mt in the same period.

Recto further said fuel prices also reflected the lethargic demand with domestic prices falling from last year as Dubai oil prices slipped from $127.82 per barrel in June last year to $69.4 per barrel in June this year. He added that electricity rates also declined as generation charges fell from PhP4.43 per kilowatt hour to PhP4.26 per kilowatt hour in June 2009.

Inflation rate for the National Capital Region (NCR) was registered at -0.1 percent compared to 9.2 percent in the same period last year and 0.8 percent last month. "Negative annual price adjustments were observed for fuel, light and water and selected services items in NCR," Recto said.

The inflation rate in Areas outside the NCR (AONCR) also slowed down to 2.2 percent from 12.3 percent a year ago and 4.2 percent in the previous month.

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