Abstract:

Headline inflation has remained muted at an average of 3 percent since January , which is at the low - end of the central bank’s target range. This partly owes to low food prices driven by ample food supply (Figure 13 ). Increases in rice and sugar prices were offset by lower prices in other key food items such as vegetables . Inflationary pressures on non - food items such as housing, utilities and transport also eased owing to lower fuel prices. Hence, average core inflation registered 3.5 percent from January through May (y - o - y) . Despite electricity supply shortages in Mindanao, electricity rates have remained low , albeit high by international standards, rising by a modest 6 percent in May (y - o - y) from a 9 percent high in March when electricity shortages escalated . 27 The minimum wage hike of PhP 42 in the National Capital Region ( NCR ) , effective in May, is in line with inflation expectations and therefore is unlikely to have any persistent effects on actual inflation . The large pool of un/underemployment contributes to wage restraint so that wages do not respond much to fluctuations in economic activity (Cacnio, 2012)

Info

Source Institution	World Bank
Source URL	http://www.worldbank.org/content/dam/Worldbank/document/Philippine%20Quarterly%20Update%20July%202012.pdf
Page Count	36
Place of Publication	Pasig City
Original Publication Date	July 1, 2012
Tags	Annual Report, Economic, Poverty, Quarter, Reduction, Update