Inflation steadies in April

Inflation steadies in April

Photo by Michael Varcas, The Philippine Star

INFLATION sustained its pace in April from the preceding month even as core inflation eased to a five-month low, the government reported this morning

Preliminary data from the Philippine Statistics Authority showed the consumer price index rose 4.5% year on year last month, unchanged from March, but faster than April 2020’s 2.2%.

April headline inflation was lower than the median 4.7% in an analyst poll BusinessWorld conducted late last week and settled within the Bangko Sentral ng Pilipinas’ (BSP) own 4.2-5% estimate.

Year to date, inflation averaged at 4.5%, slightly above the BSP’s 2-4% target band, as well as its inflation forecast of 4.2% for the year.

Inflation eased in the indices of food and non-alcoholic beverages at 4.8% in April from 5.8% in March; and alcoholic beverages and tobacco at 12% from 12.1%.

On the other hand, annual increases were noted in housing, water, electricity, gas, and other fuels (1.5% from 0.9%); furnishing, household equipment and routine maintenance of the house (2.1% from 1.9%); health (3.1% from 2.9%); transport (17.9% from 13.8%); communication (0.3% from 0.2%); and restaurant and miscellaneous goods and services (3.4% from 3.1%).

The following indices saw steady inflation compared with the previous month: clothing and footwear (1.6%); recreation and culture (-0.6%); and education (1.1%).

Food inflation slowed to 5% in April from 6.2% in March, albeit still faster than last year’s 3.4%.

Core inflation, which is used in determining underlying price trends by stripping out volatile prices of food and fuel, stood at 3.3% in April, easing from 3.5% the preceding month. Still, this was higher than the 2.9% core inflation in April 2020.

Core inflation that month was the slowest since the 3.2% print in November 2020, as well as matching the 3.3% figure recorded in December 2020.

So far, core inflation averaged 3.4% this year compared with the 3.1% in 2020’s comparable four months.

Meanwhile, the inflation rate for the bottom 30% of income households stood at 4.9% in April, slower than the 5.5% rate recorded in the previous month, but still faster than the 2.9% in April 2020.

The inflation rate for the bottom 30% takes into account the spending patterns of this income segment. Thus, its consumer price index differs from that of the average household with the former assigning heavier weights on necessities. — Lourdes O. Pilar

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