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2015 Inflation Averages at 1.4 Percent


Year-on-year headline inflation for 2015 averaged at 1.4 percent. This is below the Government’s inflation target range of 3.0 percent ± 1.0 percentage point for the year and is the lowest annual inflation rate since 1995 using the 2006-based CPI series. Inflation in December rose to 1.5 percent from 1.1 percent in November, but was within the BSP’s forecast range of 1.1-1.9 percent for the month.  Similarly, core inflation—which excludes certain food and energy items to better capture underlying price pressures—rose to 2.1 percent in December from 1.8 percent in the previous month. On a month-on-month seasonally-adjusted basis, inflation eased to 0.2 percent in December from 0.4 percent in November.

The increase in December inflation was traced to seasonally higher food prices, as recent weather-related production disruptions and increased holiday season demand led to higher retail prices of food, particularly fish, oils and fats, as well as milk, cheese, and eggs. Likewise, vegetable prices remained elevated, posting double-digit year-on-year inflation during the month. By contrast, rice prices continued to decline relative to year-ago levels on ample supply due to increased importation and the ongoing harvest season. Meanwhile, non-food inflation also increased during the month due largely to higher inflation for transport services. At the same time, inflation for electricity, gas, and other fuels remained in negative territory as higher electricity rates were offset by rollbacks in domestic pump prices.

Governor Amando M. Tetangco, Jr. noted that the marked decline in global oil prices in the past year was behind the fall in annual average inflation to below the target range for the first time in several years. He added that the latest inflation forecasts of the BSP show within-target inflation for both 2016 and 2017. Nevertheless, going forward, the BSP will continue to closely monitor economic and financial developments to ensure that its mandate of price stability is achieved.

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