Philippine inflation rose to 1.6 percent in May, higher than the market expectation of 1.4 percent, as both food and non-food prices picked up in the period, the National Economic and Development Authority (NEDA) said Tuesday.
The latest inflation, however, was within the Bangko Sentral ng Pilipinas' forecast of 1.1-1.9 percent for the month. Inflation a month ago was at 1.1 percent. "The increase in inflation can be attributed to higher demand due to election spending and partly to supply constraints in agriculture because of the residual effects of the weakening El Niño," said Socioeconomic Planning Secretary Emmanuel F. Esguerra.
Core inflation, which excludes volatile prices of energy and food, slightly increased at 1.6 percent as compared to the previous month and the 1.5 percent in May 2015. "The manageable inflation rate for the first five months of 2016 is expected to continue for the rest of the year as the productive capacity of the domestic economy expands and oil prices remain low," said Esguerra, who is also NEDA Director-General.
"The stability in inflation rate will create a positive environment for investments and ensure affordability of basic commodities for the poor," added Esguerra, Full-year inflation for 2016 is expected to be close to the lower bound of the inflation target set at 2.0 to 4.0 percent by the Development Budget Coordination Committee.
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