Commodity prices continue to rise in April

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FILE PHOTO. The rise in prices of widely-used goods will likely be at its fastest pace in August or September, a central bank official said.

Metro Manila (CNN Philippines, May 4) — The rise in prices of goods and services picked up faster in April, according to official data, driven by higher prices in a number of commodities.

The Philippine Statistics Authority (PSA) reported Friday inflation moved at a faster pace at 4.5 percent from 4.3 percent in March both breaching the Bangko Sentral's target of 2 percent and 4 percent for the year.

Inflation was at 3.2 percent in April 2017.

Prices of goods and services reached a three-year high last February at 3.9 percent, and has since continued the trend. Prices of most commodities spiked after the tax reform law kicked in beginning January 1.

READ: Philippine inflation rate hits 3-year high

The PSA pointed to higher prices in the following commodity groups: alcoholic beverages and tobacco; clothing and footwear; housing, water, electricity, gas, and other fuels; furnishing, household equipment and routine house maintenance; health; transport; recreation and culture; and restaurant and miscellaneous goods and services.

Among these indices, alcoholic beverages and tobacco posted the highest annual increase at 20 percent. Other indices posted single digit increases, with recreation and culture the lowest at 1.5 percent.

Food inflation alone slightly eased at 5.5 percent in April from 5.7 percent in March, but still higher than the 3.6 percent in April last 2016.

Prices in Metro Manila were unchanged in April from the 5.2 percent reported in March. PSA attributed this to mixed movements in prices of different commodity groups. But the figure is still higher than the 4 percent posted in April last year.

Prices outside Metro Manila, however, picked up at 4.3 percent from 4.1 percent in March, and against 2.9 percent in April last year.

The April inflation was at the higher end of the BSP's range of 3.9 percent to 4.7 percent, and mirrored the 4.5 percent projection of the Department of Finance (DOF).

READ: BSP sees possible higher prices in April

In its latest economic bulletin, the DOF attributed the inflation uptick to higher prices of so-called 'sin products' or alcohol and tobacco, and food.

"Sin products continue to drive inflationary pressure," it added. "Price movements, nevertheless, appear to be normalizing."

The National Economic and Development Authority (NEDA) said that this uptick in commodity prices will be temporary.

"The current surge in inflation is partly an initial reaction to the implementation of TRAIN and is expected to be short-lived and should taper off over the coming months," Socioeconomic Planning Secretary Ernesto Pernia said in a press statement.

"While the major factors contributing to the recent surge in inflation are temporary, we need to remain vigilant against emerging price pressures and to implement mitigating measures immediately," Pernia added.

The BSP is slated to discuss inflation during the next meeting of the Monetary Board on May 10.

"The BSP's decision on the monetary policy stance will seek to ensure that inflation over the policy horizon remains consistent with the target," the BSP said in a statement.

Should the need arise, the BSP is ready to adjust monetary policy, which is currently set at 3.0 percent interest rate.

READ: BSP prepares for possible policy change amid rising inflation