Inflation accelerates further to 4.7% in February

Inflation recorded its fifth straight month of acceleration in February, accelerating to its fastest level in two years due to the faster increase in the prices of food commodities during the period, the Philippine Statistics Authority (PSA) said Friday.

Inflation refers to the rate of increase in the prices of goods and services such as food, electricity, transportation, and clothing.

The PSA said inflation clocked in at 4.7% in February 2021 from 4.2% in January 2021. This is also faster than the 2.6% rate recorded in February 2020.

This is the fastest inflation rate since January 2019 when it was recorded at 4.4%.

The February inflation print is within the Bangko Sentral ng Pilipinas’ (BSP) forecast range of 4.3% to 5.1%.

“The latest outturn is consistent with the BSP’s assessment of a transitory uptick in inflation in first half 2021, reflecting the impact of weather related disturbances, the African Swine Fever on food prices, higher global oil prices, as well as positive based effects,” BSP Governor Benjamin Diokno told reports in a Viber message.

Nonetheless, the central bank chief said average inflation for the whole year is expected to remain within the 2% to 4%  percent target range over the policy horizon.

“Ang pangunahing dahilan ng pag-angat ng inflation sa buwan ng Pebrero 2021 ay ang mas mabilis na pagtaas ng presyo ng Food and Non-Alcoholic Beverages,” National Statistician Claire Dennis Mapa said. 

The heavily-weighted Food and Non-Alcoholic Beverages saw an uptick of 6.7% during the month, from 6.1% in January.

The index contributed a 57.5% share in the overall inflation rate last month.

Pork: the main culprit

“Ito ay dahil sa pagtaas ng presyo ng karne, partikular ang baboy, na may mas mataas na inflation sa antas na 20.7%, mula sa 17.1% inflation noong Enero 2021,” Mapa said.

In January, consumers saw meat prices, particularly pork, jack up as much as P400 per kilo in Metro Manila markets due to supply constraints as the African swine fever (ASF) decimated much of the hog population.

To arrest rising prices, which the Department of Agriculture blamed on unscrupulous traders and wholesalers who took advantage of the ASF situation, President Rodrigo Duterte issued an executive order imposing a 60-day price cap on pork and chicken in the National Capital Region (NCR).

Under the EO, the price of kasim and pigue should not exceed P270 per kilo. The President also fixed the price ceiling for liempo and dressed chicken at P300 and P160, respectively.

Mapa said meat prices in NCR saw a decline at an inflation rate -11.6%.

“Ito ay bumababa ng average P299 per kilo noong February versus the average P338 per kilo noong January. Sa Metro Manila bumaba ang price ng pork,” he said.

However, in areas outside Metro Manila prices of pork increased. The average price of pork with bones rose to P281 per kilo in February from P262 per kilo January or an increase of 6.2% in the area.

Pure pork meat prices, meanwhile, jumped to P317 per kilo in February from P300 per kilo in areas outside NCR.

“While there was a drop in prices of pork in NCR, we saw an increase in the price of the same product in areas outside NCR. Kaya nakita natin na tumaas ang inflation in this particular commodity,” the PSA chief said.

Other contributors

“Ang isa pang dahilan ay ang pagtaas ng presyo ng isda, gaya ng dilis, sa antas na 5.1%, mula sa 3.7% inflation noong Enero 2021,” he added.

Rice also contributed to faster food inflation. The food staple saw a 0.5% inflation from no movement in January.

“Ang pangalawang commodity group na nakapag-angat sa inflation nitong Pebrero 2021 ay ang Transport,” the PSA chief said.

“Ito ay bunga ng mas mabagal na pagbaba sa presyo ng petroleum and fuels na may inflation na -2.0% nitong buwan ng Pebrero 2021, mula sa -9.0% noong Enero 2021,” he said.

The Transport index saw an inflation rate of 10.4% and contributed 18.8% share in the overall figure.

“Ang ikatlong pinanggalingan ng pagtaas ng inflation sa bansa ay ang mas mabilis na pag-angat ng presyo sa Housing, Water, Electricity, Gas, and Other Fuels,” Mapa said.

This is due to the slow decline in the prices of electricity which had an inflation rate of -4.4% from -5.9% in January.

“Nakaambag din ang pagtaas ng presyo ng LPG na may inflation na 2.5% sa buwan ng Pebrero 2021, mula sa pagbaba ng presyo sa antas na -0.5% noong Enero 2021,” the PSA chief said.

The Restaurant and Miscellaneous Goods and Services, which rose by 3.2%, also contributed in the faster inflation in February with 9% share to the total.

“Ang pangunahing nag-ambag sa inflation ng Restaurant and Miscellaneous Goods and Services nitong buwan ng Pebrero 2021 ay ang mga sumusunod: Meals na may 3.2% inflation; Articles for personal hygiene, kagaya ng rubbing alcohol at toothpaste, 2.8% inflation; at Barbershop services na may 9.7% inflation,” Mapa said.

On the other hand, inflation slowed down for furnishing, household equipment and routine maintenance of the house at 2.4%.

The indices of the rest of the commodity groups retained their previous month’s annual rates, according to the PSA.

NCR inflation

Inflation in NCR eased to 4.1% during the month, from 4.3% in January 2021.

The index of recreation and culture still moved downward as its annual rate dropped to -0.4% during the month.

In additon, annual hikes decelerated in the indices of the following commodity groups:

•     Food and non-alcoholic beverages, 7.1%
•     Clothing and footwear, 0.8%
•     Furnishing, household equipment and routine maintenance of the house, 3.1%
•     Restaurant and miscellaneous goods and services, 1.0%

The rest of the commodity groups either had higher annual increases or retained their previous month’s annual growth rates, according to the PSA.

Areas outside NCR

Following the trend of the national level, inflation in areas outside NCR (AONCR) accelerated further to 4.8% in February 2021, from 4.2% in January  2021.

Uptrend in the inflation in AONCR was mainly brought about by the higher annual increase in the index of the heavily-weighted food and non-alcoholic beverages at 6.6%.

The jump in the inflation of transport to 9.7 percent during the month, from 7.9 percent in the previous month also contributed to the acceleration in the inflation in AONCR.

All regions in AONCR, except Region II (Cagayan Valley), had higher inflation in February 2021.

The highest inflation during the month was recorded in Region II (Cagayan Valley) at 7.9%, while the lowest was seen in Region VII (Central Visayas) at 1.0%.

Inflation for bottom 30%

Inflation felt by the bottom 30% income households, meanwhile, rose to 5.5% in February.

This is the highest inflation for the bottom 30% income households since January 2019.

“Ang Food and Non-alcoholic Beverages na may 5.6% inflation ang pangunahing dahilan ng pagtaas ng antas ng inflation sa Bottom 30% income households nitong buwan ng Pebrero 2021,” Mapa said.

“Sumunod dito ang Restaurant and Miscellaneous Goods and Services na may 4.1% inflation; at Transport na may 19.2% inflation,” he added.—KBK/AOL, GMA News