Inflation eases further in January

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INFLATION continued to decelerate in January, the government reported this morning.

Preliminary data from the Philippine Statistics Authority (PSA) showed January inflation at 4.4%, slower than December’s annual rate of 5.1% albeit faster than the 3.4% print in January 2018.

The preliminary result was lower than the 4.5% median estimate in a BusinessWorld poll of 12 economists and analysts conducted late last week. It was, however, within the Bangko Sentral ng Pilipinas’ (BSP) 4.3%-5.1% range seen for that month.

The January reading marked the third straight month of decelerating inflation from a peak of 6.7% in September and October.

The annual January result was also the slowest since the 4.3% result in March.

The PSA attributed last month’s inflation rate to slower increments posted by the heavily weighted food and non-alcoholic beverages, which increased by 5.6% in January from 6.7% in December and 4.4% in January last year.

Core inflation, which strips the volatile food and energy items, was 4.4% last month versus December’s 4.7% and January 2017’s 2.6%.

The BSP sees full-year 2019 headline inflation to average 3.2%, slower compared to the 5.2% finish in 2018 and crawling back to the 2%-4% target band. – Mark T. Amoguis