NEWSFLASH

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FOOD PRICES KEEP INFLATION DOWN

Manila, Jan. 7, 1998 - The price increases of food products remained moderate, keeping inflation down in December and helping the government meet its inflation target of 6% to 6.5% for 1997.

The government announced yesterday that the consumer price index was up 6.1% last month compared to a year earlier. This brought the 1997 average inflation rate to 5.1% compared with 8.4% in 1996.

In December, the inflation rate for food was 3.2% , compared with 3.7% the previous month. Analysts said food manufacturers were reluctant to pass on the full effect of the weaker peso to consumers because they feared a slump in sales over the Christmas period.

"The relatively low food inflation is only a temporary reprieve and not indicative of a trend," said Peregrine Securities chief economist Luz Lorenzo.

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