Inflation slows to 5.1% in December 2018

Inflation, or the rate of increase in the prices of goods and services, slowed down to 5.1 percent in December 2018, marking the lowest annual rate since last June, the Philippine Statistics Authority (PSA) said Friday.

The slower inflation rate last December was mainly driven by the slower yearly increases in the indices of food and non-alcoholic beverages at 6.7 percent and transport at 4.0 percent.

“The Philippine’s year-on-year headline inflation in December 2018 was 5.1 percent,” PSA chief Lisa Grace Bersales said at a press briefing. “This is the lowest annual rate since June 2018.”

The slower rate of increase in prices of food, non-alcoholic beverages, and transport were “the main contributors to the deceleration of inflation in December,” Bersales noted.

She cited the minimum jeepney fare rollback of P1.00 to P9.00 and the series of fuel price reductions in December as contributing factors that helped ease inflation.

“Nag rollback ang jeepney fares, may mga rollback sa mga petroleum prices. So nakita namin na itong mga rollback na ito na main contributor ng deceleration of prices in transport,” Bersales said.

In an interview on GMA News’ “News to Go,” UP School of Economics professor John Carlo Punongbayan cited the downtrend in fuel prices and harvest season as factors that brought down prices last month.

“Medyo sinuwerte tayo, kasi bumaba ang presyo ng langis sa pandaigdigang merkado at harvest season na rin kasi. Kung matatandaan natin mataas ang presyo ng bigas noong nakaraang taon pero dahil sa harvest season ay bumaba,” Punongbayan said.

Last month’s inflation print is slower than the 6 percent posted in November, but faster compared with 2.9 percent posted in December 2017.

It was also the first time it settled below the 6 percent since it hit 6.4 percent in August 2018. In September and October 2018, inflation clocked in at 6.7 percent—the highest in nine years.

The Bangko Sentral ng Pilipinas has given an inflation outlook of 5.2 percent to 6.0 percent, while analysts gave an estimate of 5.2 percent.

Year-to-date, inflation settled at 5.2 percent in January to December and hit the government’s revised forecast range of 4.8 percent to 5.2 percent.

For the whole of 2018, inflation was the fastest in 11 years since hitting 8.2 percent in 2008, according to the PSA.

The full-year inflation average settled outside the government’s target range of 2 to 4 percent.

Consumer prices rose mainly because of the higher excise taxes on petroleum products and sugar sweetened beverages in light of the Tax Reform for Acceleration and Inclusion (TRAIN) law as well as the sudden spike in crude oil prices in the world market, the PSA noted.

“Overall, while decelerating inflation is good news, access to affordable food prices in poverty stricken regions remain a major burden that must be addressed immediately,” Asian Institute of Management economics professor Emmanuel Leyco said.

Month-on-month, inflation declined by 0.4 percent to mark the second straight month of slowing down, Bersales noted. —KBK/VDS, GMA News