Philippine annual inflation accelerated more than expected in December to hit its highest in seven months, the country's statistics agency said on Tuesday.
Mainly driven by holiday-related demand in food and beverages as well as fuel prices, headline inflation was 1.5 percent in December, up from the 1.1 percent registered in November but down from 2.7 percent a year earlier, Philippine Statistics Authority (PSA) reported.
Core inflation in December was 2.1 percent compared with 1.8 percent the previous month, but the monthly rise in consumer prices slowed to 0.2 percent from November's 0.5 percent. "Higher annual rates were registered in the indices of alcoholic beverages and tobacco; health; transport; and recreation and culture," the PSA said in a statement.
"Similarly, annual inflation in the National Capital Region (NCR) inched up 1.1 percent in December. It was recorded at 1.0 percent last month and 1.6 percent in December 2014. The uptrend was due to faster annual increment in the transport index."
"Inflation in Areas Outside NCR (AONCR) likewise advanced to 1. 5 percent in December 2015. In November, it grew by 1.1 percent and in the same period last year, 3.0 percent. The indices of six out of the 11 commodity divisions had higher annual rates during the month. The average inflation for 2015 slowed down to 1.5 percent from 4.5 percent in 2014." Headline inflation could have accelerated to 1.5 percent last month due to higher food and fuel prices, among others, the Finance department said in its latest economic bulletin on Monday.
The Finance department said the biggest contributors to the December increase would be transport inflation (from 0.6 percent to 1.3 percent), alcoholic beverages and tobacco (from 3.9 percent to 4.6 percent), food (from 1.7 percent to 2 percent), and recreation and culture (from 1 percent to 2 percent).
"Food is adversely affected by Typhoon Lando and holiday-related demand upsurge, transport by lagged effect of fuel prices and alcoholic beverages, recreation and culture due to the holiday demand," the Finance department said.
"The recovery of food supply is very important after a strong typhoon; authorities can encourage and develop private sector sources of seeds and seedlings and look into alternative ways of replenishing lost stock (perhaps though imports from Association of Southeast Asian Nations)," it added.
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