December inflation slows down to 2.7%

MANILA, Philippines - The country's headline inflation decelerated for the fourth consecutive month in December, slowing down to 2.7 percent from the previous month's 3.7 percent.

The Philippine Statistics Authority on Tuesday noted that the slowdown resulted from annual decreases in the indices of housing, water, electricity, gas and other fuels and transport.

"This is the fourth consecutive month that headline inflation slowed down, which pulled average inflation for full-year 2014 to 4.1 percent. Thus, the government stayed within its inflation target of 3 to 5 percent for 2014," the National Economic and Development Authority (NEDA) noted.

NEDA Director-General Arsenio Balisacan said the lower inflation in December bodes well for consumption growth in the fourth quarter of 2014.

Core inflation, excluding selected volatile food and energy prices, similarly went down to 2.3 percent from 2.7 percent in November 2014 and 3.2 percent in December 2013. It averaged 3 percent for 2014.

In December 2014, there were also recorded contractions in the price indices of petroleum electricity, gas and other fuels (-8.3 percent from -2.6 percent) and operation of personal transport equipment (-6.0% percent from -1.2 percent).

“Electricity rates were lower year-on-year in December 2014 after a decline in generation and transmission charges was noted on the back of improved availability of power plants and lower cost of fuel,” Balisacan said. Meralco charges went down by 13 percent in December, amounting to a reduction of P0.73 per kilowatt hour.