Inflation steady at 4.5% in April within gov't expectation

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Metro Manila (CNN Philippines, May 5) — The pace of increase in prices of basic goods was unchanged at 4.5% in April, the same as in March, as the government reimposed the strictest lockdown restrictions over the Greater Manila area.

Data from the Philippine Statistics Authority on Wednesday showed inflation settled at 4.5% for the month, the same as that posted in March, but quicker than 2.2% a year ago.

April's inflation rate is within the 4.2% to 5.0% target range set earlier by the Bangko Sentral ng Pilipinas.

In a virtual briefing, National Statistician Dennis Mapa attributed April's flat reading to the varying movements in prices of commodity groups.

"Ang magkakaibang paggalaw ng presyo sa mga commodity groups nitong Abril 2021 ay nagresulta sa magkaparehong antas ng inflation nitong Abril 2021 at Marso 2021," he said.

[Translation: The varying price movements in commodity groups in April resulted in the same level of inflation in March 2021.]

According to Mapa, food and non-alcoholic beverages continued to be the driver with an inflation of 4.8% in April, lower than the 5.8% logged in a month prior. This group recorded a 40.9% share in the overall inflation print.

Meat prices took the lead with an inflation of 22.1% from a year ago, followed by fish at 6%. Pork products, Mapa stressed, kept their high prices despite the government's moves to address this issue. Price tags for chicken and beef also increased in the period.

If there would be no intervention, meat inflation "will continue to go up", Mapa said.

"The recent executive order related to pork importation should help bring down pork prices in the near term," he said in a statement.

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However, he said consumers witnessed a downward price trend for fruits and vegetables.

Expensive transport costs, meanwhile, made transportation the second commodity group with the biggest share, recording 17.9% inflation and 32.1% share. Tricycle fare led the surge at 48.4%, followed by petroleum and fuels at 32% and jeepney fare at 6.3%.

Expenses for restaurant meals, items for personal hygiene also rose for the month at 3.4%, the PSA said.

The PSA also noted faster inflation in housing, water, electricity, gas, and other fuels with 1.5% versus March's 0.9%.

The health basket also realized an uptick at 3.1% against the 2.9% posted in March.

Mapa said it was "possible" that the slight jump in health inflation was buoyed by the surging COVID-19 cases in the Philippines.

"May nakita tayong pagtaas sa mga gamot at the same time may pagtaas din sa mga laboratory services," he said.

[Translation: We have seen an increase in prices of medicines and at the same time an increase in laboratory services.]

Inflation in Metro Manila and in areas outside the capital was also flat at 3.7% and 4.7%, respectively.

"Should price pressures continue to dissipate, we can expect inflation to decelerate as early as next month with 4.5% possibly the peak for the year," Mapa said in a statement.

"We expect BSP (Bangko Sentral ng Pilipinas) to remain on hold for the whole of 2021 to provide support to the economy and we believe inflation will begin to decelerate further in May as supply side issues are addressed by supply side remedies," he added.