Gov’t to maintain 4-5% inflation target for 2004

The government remains confident of hitting the four to five percent inflation target this year despite the build-up of inflationary pressures from higher oil prices, petitions for a new round of transport fare hikes and increase in the minimum wage, and the heavy election spending.

Based on 1994 levels, the nationwide average inflation rate – the measure of price increases in basic goods and services – went up to 4.1 percent last month from 3.8 percent in March and 2.8 percent a year ago as prices of food, beverage, and tobacco, housing and repairs, and services accelerated.

Using the revised basket of commodities at 2000 prices, the inflation rate rose 4.2 percent in April.

"The average inflation to date of 3.7 percent using the 1994 basket and four percent using the 2000 basket is within the Development Budget Coordination Committee (DBCC) target of four to five percent," Socioeconomic Planning Secretary and National Economic and Development Authority (NEDA) Director General Romulo Neri said.

He noted that food items such as rice, corn, meat, fish, and dairy products exerted the most pressure on inflation during the period.

Prices of meat increased 13.5 percent from a year ago, the highest recorded increase year-on-year since 1992, as producers continued to pass on the rising cost of feeds for livestock and poultry to consumers.

In Metro Manila, the average prices of dressed chicken in the market rose 10.5 percent from the previous year. Fish prices also went up by 7.2 percent as consumers shifted from meat to fish during the observance of the Lenten season. Higher costs of shipment of imported raw materials for production, on the other hand, pushed prices of dairy products up by an average of six percent.

The increase in food prices, however, was offset by lower prices for utilities, as fuel, light, and water costs slowed down to 1.4 percent. At the same time, miscellaneous items decelerated to 1.4 percent.

Core or underlying inflation, which nets out the prices of volatile items such as rice, corn, fruits and vegetables, and some fuel products, also accelerated to 4.3 percent from 4.0 percent using the

1994 consumer price index. (CPI). Likewise, using the 2000 CPI, core inflation accelerated to 4.7 percent in April compared with 4.6 percent the previous month.