The Bangko Sentral ng Pilipinas (BSP) had projected the Consumer Price Index (CPI) to rise 7.8 percent year-on-year in January while the National Economic and Development Authority (NEDA) estimated an eight-percent growth.
Since January the government is basing its inflation data on a 2000 price basket rather than 1994 prices.
Socioeoconomic Planning Secretary Romulo L. Neri said that "food inflation slowed down, especially in Metro Manila, as the holiday demand came to a close and supplies were restored following the havoc wrought by the December typhoons."
"A slower annual increment in the inflation of services also contributed to the downtrend," he added.
Neri, who as NEDA Director General is co-chair of the Development Budget Coordination Committee (DBCC), also reported that the Committee (DBCC) has set the 2005 inflation target at five to six percent.
"In consultation with the Bangko Sentral ng Pilipinas, the DBCC has set the inflation target at five to six percent in 2005 from the previous four to five percent to reflect the shift to the 2000-based CPI series and to incorporate additional inflation risks that have emerged since the target was originally set in 2004," Neri said.
Excluding selected food and energy items, core inflation rose to 7.9 percent in January from December’s 7.8 percent.
Most economists said they have yet to come up with new inflation forecasts based on the 2000 basket.
One economist who did had expected January CPI to slow to 8.2 percent.
Julian Wee, an economist at research firm IDEAglobal.com in Singapore who provided the estimate, noted that oil prices will continue to be a concern given the country’s dependence on imports although its impact may be less this year if prices remain in a tight range.
Citing a report from the NSO, Neri noted that prices of several commodities monitored by the Bureau of Agricultural Statistics declined significantly from December levels such as chicken egg (from P3.35 to P3.31), amargoso (from P62.08 to P50), sitao (from P59.75 to P54), habitchuelas, white potato (from P31.67 to P30), eggplant (from P58.75 to P34.58), pechay (from P55.83 to P31.67), calamansi (from P50.83 to P44.17), and carabao mango (from P69.17 to P54.17).
This helped partially offset the increase in beef, fish, cabbage, carrot, tomato, red onion, lakatan, and brown sugar prices, which were partly responsible for the 0.7 percent increase in food prices over the month.
By area, inflation in the National Capital Region went up to 8.9 percent in January from 8.4 percent in December. In the provinces, prices grew by a slower 8.3 percent from 8.6 percent in December.