Q4 inflation quickens by 2.5%

Consumer prices rose by 2.5 percent in the fourth quarter of 2016, from 2.0 percent in the third quarter, the Bangko Sentral ng Pilipinas (BSP) reported on Friday, citing higher food prices.

"The supply of food commodities, including rice, remained generally adequate in 2016, although the adverse impact of weather disturbances on the supply of key food items, as well as seasonal demand, contributed to the uptick in food inflation later in the year," the BSP noted.

"International crude prices also rebounded in the fourth quarter following plans of production cutbacks among major oil-producing countries, although the increase in prices was not enough to offset the substantial decline seen in 2015," it added.

Land Bank of the Philippines market economist Guian Angelo Dumalagan cited higher oil and food prices for the faster inflation rate.

"Oil prices rose because of the output cut agreement among global oil producers. Meanwhile, food prices jumped due to strong demand and supply constraints caused by the typhoons that hit the country," Dumalagan said.

Core inflation, which excludes certain volatile food and energy items, clocked in also by 2.5 percent from 2.0 percent in third quarter.

For the whole 2016, the average inflation hit 1.8 percent, from 1.4 percent in 2015.

However, it is still bellow the government's target of 3.0 percent ± 1.0 percentage point for 2016.

The BSP noted that the objective of the quarterly inflation reports is part of the efforts to improve the transparency of monetary policy under inflation targeting and to convey to the public the overall thinking and analysis behind the Monetary Board’s decisions on monetary policy. — Ted Cordero/VS, GMA News