Inflation picks up at 2.9% in January 2020

Inflation or the rate of increase in the prices of goods and services accelerated in the first month of 2020, the Philippine Statistics Authority (PSA) reported on Wednesday.

“The year 2020 started off with a higher national headline inflation rate of 2.9%,” PSA chief Claire Dennis Mapa said.

“This is the highest inflation recorded since June 2019, in which the inflation was posted at 2.7%,” Mapa said.

The January inflation print is faster than the 2.5% rate recorded in December 2019. It is slower compared with the 4.4% figure posted in January 2019.

“The main source of the upward trend in January 2020 inflation was the higher annual increment in transport,” he said.

The PSA chief also attributed the faster inflation rate last month to higher annual increase in alcoholic beverages and tobacco.

Last month, President Rodrigo Duterte signed a law increasing excise taxes on alcohol, heated tobacco and vapor products as the government aims to raise additional revenues to fund the Universal Health Care program.

“In addition, the higher annual rate observed in housing, water, electricity, gas, and other fuels contributed to the uptrend in the inflation in January 2020,” Mapa said.

Among the 11 major commodity groups, the PSA chief said the top contributor to last month’s inflation print was food and non-alcoholic beverages, which posted an annual rate of 2.2% and shared 30.8% to the overall inflation.

“The second major contributor to the overall inflation was housing, water, electricity, gas, and other fuels, which recorded an inflation of 2.5% and a share of 20.1% to the overall inflation,” Mapa said.

“The third commodity group that largely contributed to the overall inflation was restaurant and miscellaneous goods and services, which had a 2.6% inflation and 12.0% share to the overall inflation in January 2020,” he said.

A slower annual increase of 2.6% was noted in restaurant and miscellaneous goods and services index last month.

“The rest of the commodity groups retained their previous month’s annual rates,” Mapa said.

Meanwhile, food inflation grew by 2.1%. It is faster than 1.7% recorded in December 2019 but slower compared with 5.1% in January 2019.

The PSA said following food groups registered higher annual mark-ups in January 2020:

• Meat, 3.4%
• Fish, 8.8%
• Oils and fats, 0.7%
• Fruit, 7.7%
• Vegetables, 8.3%
• Food products, 6.8%

Annual rates in the indices of rice declined by 6.5%; corn, 1.5%; and sugar, jam, honey, chocolate and confectionery, 2.2%.

Inflation in the National Capital Region (NCR) slowed down to 2.7% in January 2020.

“Its annual rate was posted at 2.8%  in December 2019, and 4.6% in January 2019,” Mapa said.

“This downtrend was effected by the slowdown in the annual increase of food and non-alcoholic beverages index at 3.4 percent during the month,” he said.

In areas outside NCR (AONCR), inflation followed the national trend as it went up further by 3.0%.

“Except in Cordillera Administrative Region (CAR), whose inflation remained at 2.8%, all the regions in areas outside NCR posted higher annual mark-ups in January 2020,” Mapa said.

“The highest inflation was still observed in Region V (Bicol Region) at 3.9%, while the lowest remained in Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) at 1.0%,” he said. —KBK/KG, GMA News