Metro Manila (CNN Philippines) — Headline inflation — the overall increase of prices for goods and services — dropped to a record low of 1.7% in the second quarter of 2015, according to figures from the Bangko Sentral ng Pilipinas (BSP) relative to its 2006-based Consumer Price Index series.
The figure is markedly lower than the quarter and year-ago rates of 2.5% and 4.4%, respectively. Headline inflation has dropped for the past three consecutive quarters, after rising 4.6% in Q3 2014.
The year-to-date inflation rate of 2% remains with the government’s 2% to 4% target range for 2015.
In a statement, the BSP said that moderate price increases for most food items — due mainly to adequate supply — helped push the figure down. Likewise, lower prices of electricity and domestic petroleum products eased inflation for non-food items.
Private sector economists, according to the BSP’s June 2015 Consensus Economics survey, believe that the decline in oil and food prices may offset the effects of the El Niño dry spell, possible power shortages, election-related spending, and an expected interest rate increase in the U.S.
The same survey forecasts yearly inflation at 2.4% in 2015 and 3.5% next year.
Core inflation, which excludes selected volatile food and energy prices, also decelerated further to 2.2% during the second quarter, from 2.5% during the first three months of the year and 3% in Q2 2014.
The BSP said that an uneven pace of global growth amid soft commodity prices — including oil — is expected to keep inflation benign. “The international price of oil is projected to remain below 2014 levels as the current oil market oversupply persists in the coming months.”
“Inflation expectations remain well-anchored while domestic economic activity continues to expand at a solid pace, the BSP said.
