INFLATION SLOWS TO 2.9% IN SEPT; ELECTION SPENDING SEEN TO BOOST '03 SALES

MANILA, OCTOBER 6, 2003  (STAR) "Barring unexpected shocks in the coming months," Neri said, "we expect inflation to remain stable at around three percent on account of improved palay and corn output and stability in the currency market."

But he warned of inflationary pressures that will mainly come from higher cost of crude oil following a decision by the Organization of Petroleum Exporting Countries (OPEC) to cut production.

Neri said electricity rates declined by 0.9 percent in selected provinces in September from the previous month as electric cooperatives reduced their rates in compliance with the Electric Power Industry Reform Act, which allows loan condonation in exchange for rate reductions.

The NEDA expects further reduction in areas outside Metro Manila, he said, because the Energy Regulatory Commission is hearing more applications from other electric cooperatives for settling their loans with lower rates.

Neri said rice prices decreased by 0.1 percent in September as ample inventories were augmented with the onset of the harvest season in some provinces.

According to the NEDA survey, prices of fruits and vegetables, specifically ampalaya, sitao, carrots, habitchuelas, white potato, eggplant and calamansi, declined also by 0.1 percent.

Neri pointed out that the decline in rice, fruit and vegetable prices partly offset the rise in prices of other food, such as bangus, galunggong, cabbage, tomatoes, pechay and mangoes.

On the average, he said domestic retail fuel prices rose by 0.9 percent in September despite the 8.4 percent decline in Dubai crude oil prices from $27.66 to $25.37 per barrel. He attributed the increase to the depreciation of the peso against the dollar.

Election spending seen to boost sales in 2004 By Marianne V. Go (Star 10/06/2003)

Automatic Centre president Samie Lim expects 2004 as a better year for retailers due to election spending.

According to Lim, retail sales during the first three quarters of 2003 have been generally flat.

However, Lim said sales are expected to begin picking up by the fourth quarter.

"The last quarter will good because of election money," he said.

This trend, Lim said, would likely carry over to the first and second quarter of next year.

"After that, however, especially when the first 100 days honeymoon with the new administration is over the picture becomes hazy, he said."

According to Lim, traditional retail business was down this year. Sales of white appliances were also flat.

But sales of home entertainment and new technology product were up.

"The retail sales trend merely reflected the shift in consumer preferences as more people preferred to stay home," he said.

Lim said most consumers have been downgrading their preferences from food to fashion.

"The newest, most exciting development was in the services sector," he said.

Again in line with the trend, Lim noted that the repair business is booming as people are not buying anything new.

Thus, services such as interior designing/decorating are up because more people are entertaining at home rather than going out to restaurants.


Reported by: Sol Jose Vanzi

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