Neda says gov’t keeping close watch on volatile oil price

The government remains vigilant and mindful of the renewed volatility in the prices of petroleum products even as the country’s headline inflation rate in February 2012 slowed down to 2.7 percent, according to the National Economic and Development Authority (Neda).

“Petroleum products are considered as input costs to production and in transporting people and goods that ultimately affect headline inflation. Given the substantial impact of a very high oil price, reasonable and timely implementation of programs and projects are vital in maintaining stable consumer prices while ensuring continuous supply of goods and services,” said Socioeconomic Planning Secretary Cayetano Paderanga Jr.

Paderanga made this statement following the National Statistics Office (NSO) report on the headline inflation in February 2012, which he noted was the country’s lowest since October 2009.

Headline inflation rate is the percent change in the average prices of goods and services commonly purchased by households, as measured by the Consumer Price Index (CPI).

“For the first two months of 2012, the headline inflation averaged ate 3.3 percent, which is within the Philippine Development Plan’s target of 3.0 to 5.0 percent,” said Paderanga, who is also Neda director-general.

The Cabinet official noted that prices of all major commodity groups recorded slower price upticks last month, except health, which remained at 2.8 percent, and the very slight increase in the prices of recreation and culture.

Meanwhile, the communication index posted a 0.1 percent price reduction compared with the 0.2 percent decline in January 2012.

“Prices of food and alcoholic beverages, which comprise 39 percent of the CPI, increased at a slower rate. The Bureau of Agricultural Statistics (BAS) reported that prices were generally stable in Metro Manila from Feb. 22 to March 1 on account of abundant supplies of fresh farm products at wholesale markets,” Paderanga said.

Citing data from BAS, the Neda chief said that continued flow of supplies from various domestic production sites resulted in significant year-on-year contractions in the average prices of red onion (-53.5 percent in February 2012 from -20.4 percent in January 2012), tomato (-36.5 percent from -22.6 percent), cabbage (-21.7 percent from -4.4 percent), and amargoso (-17.6 percent from -10.9 percent), as well as slower price increases of carrots (6.1 percent from 61.9 percent) and native pechay (23.4 percent from 76.6 percent).

“The easing of inflation was also recorded in neighboring Southeast Asian economies,” Paderanga said.

He observed that Thailand and Indonesia’s headline annual inflation in February 2012 slowed down to 3.4 and 3.6 percent, respectively, in February 2012, which is a decline of 0.03 percentage point (ppt) for Thailand and 0.09 ppt for Indonesia relative to January 2012.

In addition, Singapore and Malaysia’s January 2012 inflation rates moderated to 4.8 percent and 2.7 percent, respectively, from 5.5 percent (Singapore) and 3.0 percent (Malaysia) in December 2011.  –Daily Tribune