Philippine inflation eases to 7.1% in January

MANILA, Feb. 5 (Chinese media) -- Lower energy and food prices on the international market dragged down the annual inflation of the Philippines to 7.1 percent in January, the government said on Thursday.

The Philippine inflation has declined for five straight months from the 17-year high of 12.5 percent in August 2008, according to data released by the National Statistics Office on Thursday.

The January figure is the lowest in ten months.

Core inflation, which excludes volatile food and energy items, slid to 6.9 percent in January from 7.3 percent in December.

The decline was much expected as the international food and oil prices remained at low levels. The Philippines depends on importation for 90 percent of domestic oil consumption.

With slowing hikes in commodity prices, Central Bank Governor Amando M. Tetangco, Jr. said the monetary board has gained more elbow room in deciding on policy rates.

"This confirms our expectation for continued slowdown in price increases and gives the central bank more room to support the economy and ensure there is sufficient liquidity for the efficient working of the financial markets," Tetangco said.

The central bank cut policy rates by 50 basis points on Jan. 29.It expected inflation to drop to an average of 5.5 percent for the whole year in 2009.