Low oil prices, ample food supply ease inflation

inflation feb 2016

“The persistent global oversupply and record stockpile levels of crude oil contributed to this softer inflation, as prices of Dubai oil, Brent and West Texas Intermediate continued to weaken in January 2016,” said Socioeconomic Planning Secretary Emmanuel F. Esguerra.

As of February 2016, domestic petrol prices displayed downward price adjustments based on figures in the same month in 2015: gasoline (-10.4%); liquefied petroleum gas (-11.7%); diesel (-26.4%), and kerosene (-22.6%).

Inflation in food items was also slower due to ample supply conditions. Slower upward price adjustments were observed in fish, other cereals, flour, cereal preparation, bread, pasta and other bakery products, milk, cheese and eggs, fruits, and vegetables.

“The implementation of programs related to mitigating the impact of El Niño such as cloud seeding operations, installation of alternative irrigation systems, crop rotation, the use of hybrid crop varieties, and other government assistance for farmers, helped ease price pressures on food,” Esguerra said.

Core inflation, which excludes volatile prices of energy and food, likewise eased to 1.5 percent in February 2016 from 1.8 percent in the previous month.

“This low inflation environment is likely to continue as external downward pressures remain. Notably, global oil prices are expected to be lower by 27 percent on average in 2016,” the Cabinet official said.

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—From the National Economic and Development Authority