Inflation eases to 6.3% in August 2022 —PSA

Inflation, or the rate of increase in the prices of consumer goods and services, decelerated slightly in August, snapping a five-month uptrend, amid slower increase in transport and food costs, the Philippine Statistics Authority (PSA) reported on Tuesday.

Inflation clocked in at 6.3% in the previous month, PSA chief and National Statistician Claire Dennis Mapa said at a press conference.

August’s inflation print was slower than the 6.4% rate recorded in July, but faster than the 4.4% rate posted in August 2021.

Last month’s inflation is also within the Bangko Sentral ng Pilipinas’ forecast range of 5.9% to 6.7%.

This brought the year-to-date average inflation to 4.9%, within the Marcos administration’s assumption of 4.5% to 5.5% for the entire year.

“Ang dahilan ng pagbagal ng antas ng inflation nitong Agosto 2022 ay ang mas mabagal na paggalaw ng presyo ng Transport. Ito ay may 14.6% inflation at 57.9% share sa pagbaba ng pangkalahatang inflation sa bansa,” Mapa said.

(The reason for the slowdown of inflation in August 2022 is the slower price movement of Transport. This has a 14.6% inflation and 57.9% share in the decline for the overall inflation in the country.)

Inflation for Transport index was at 18.1% in the prior month.

Contributing to the slowdown in Transport index’s inflation was the slower increase in the price of gasoline at 31.2% from 45.4% in July and diesel prices at 70.9% from 91.3% in the prior month, he said.

“Ang pangalawang commodity group na nagpakita ng pagbagal ng antas ng inflation nitong Agosto 2022 ay ang Food and Non-Alcoholic Beverages na may 6.3% inflation at 41.5% share sa pagbaba ng pangkalahatang inflation sa bansa,” the PSA chief said.

(The second commodity group that showed slowdown in inflation this August 2022 is Food and Non-Alcoholic Beverages which recorded 6.3% inflation and 41.5% share in the overall slowdown of inflation in the country.)

Inflation for the Food and Non-Alcoholic Beverages index declined from 6.9% in July.

For the slowdown in Food and Non-Alcoholic Beverages index, contributors were the slower pace of cost increase in fish and other seafood at 7.2% from 9.2%, meat and other parts of slaughtered animals at 9.6% from 9.9%, and vegetables at -2.7% from 5.6%.

Meanwhile, sugar, confectionery and desserts saw a spike to 26% from 17.6% amid the supply issues concerning sugar.

However, Mapa said the contribution of sugar to the food basket is only 1.05% and its overall weight to the consumer price index is a measly 0.46.

In a separate statement, Socioeconomic Planning Secretary and National Economic and Development Authority (NEDA) chief Arsenio Balisacan highlighted the government’s subsidy programs and its interventions to ease the impact of global inflationary pressures and protect the purchasing power of Filipinos.

Balisacan said the government is providing fuel discounts to farmers and fisherfolk.

The NEDA chief said more than 158,000 eligible farmers and fisherfolk are each set to receive P3,000 as fuel discounts to help cushion the impact of higher fuel prices.

As of August 17, 2022, a total of 131,145 accounts for target beneficiaries have been created nationwide, of which 120,827 accounts were already loaded with fuel discounts and 42,084 cards have already been distributed to corn farmers and fisherfolk nationwide, according to the country’s chief economist.

The Department of Budget and Management has also approved the release of P1.4 billion additional funds to support the extension of the Libreng Sakay Program for all passengers of the EDSA Bus Carousel until year’s end, which will support up to 50 million riders, including workers as well as students who are back to face-to-face classes.

“It is our top priority to ensure that Filipino households have sufficient and healthy food on their table, especially the poorer sector of the society. We will continue implementing programs that reduce transport and logistics costs to bring inflation down and to protect the purchasing power of our consumers. Most importantly, it is imperative to transform Philippine agriculture into a dynamic and productive sector to speed up our recovery and significantly reduce poverty in the country,” Balisacan said.

The BSP, for its part, said that it is ready to take further policy actions to bring inflation toward a target-consistent path over the medium term, consistent with its primary objective to promote price stability.

“The BSP also continues to urge timely implementation of non-monetary government interventions to mitigate the impact of persistent supply-side pressures on commodity prices,” the central bank said.

“The BSP will continue to carefully monitor and assess pertinent economic developments that could affect the price dynamics and growth prospects of the country. The Monetary Board will update its assessment of the macroeconomic outlook as well as conduct its review of the monetary policy stance on 22 September 2022,” it said.

Inflation in Metro Manila, outside NCR

Inflation in the National Capital Region, in contrast with the national trend, saw an uptick to 5.7% from 5.1% in July.

The PSA reported that the acceleration of inflation in NCR was brought by the higher annual increment in the Restaurants and Accommodation Services index at 5.7% from 3%.

Higher annual hikes were also observed in the indices of Alcoholic Beverages and Tobacco at 7.8%; Housing, Water, Electricity, Gas and Other Fuels at 4.6 percent; Furnishings, Household Equipment and Routine Household Maintenance at 3.3%; Education Services at 8.1%; and Personal Care, and Miscellaneous Goods and Services at 2.3%.

Areas outside Metro Manila followed the trend at the national level as inflation slowed down to 6.5% from 6.8% in July due to lower annual growths in the indices of transport at 14.7%; food and non-alcoholic beverages at 6.3%; and information and communication at 0.6%.

Six regions in areas outside NCR saw lower inflation in August, while eight regions had higher inflation prints, and two regions retained their previous month’s inflation rate, according to the PSA

Region 9 or Zamboanga Peninsula had the highest inflation rate of 9.1%, while the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) remained as the region with the lowest inflation at 4.9%.

Inflation for bottom 30%

On the other hand, inflation felt by the bottom 30% income households remained at 5.9% in August.

Faster price increases were seen in the indices of Alcoholic Beverages and Tobacco at 8.9%; Clothing and Footwear at 2.7%; Housing, Water, Electricity, Gas and Other Fuels at 7.3%; Furnishings, Household Equipment and Routine Household Maintenance at 4.3%; Health at 2.6%; Transport at 10.4%; Recreation and Culture at 3%; Education at 7.4%; and Restaurants and Miscellaneous Goods and Services at 4.6%.

The index for Food and Non-Alcoholic Beverages decreased to 5.5%, while the Communication index retained its previous month’s annual growth rate at 0.5%.

Inflation for Food at the national level decelerated for the bottom 30% slipped to 5.7% in August 2022, from 6.1% in the previous month.

The lower food inflation in August 2022 was due to the lower annual growth in the indices of fish and seafood at 5.5%, from 8.4% in the previous month; and vegetables at 2.8 percent, from 8.8%, according to the PSA.

The index for meat also recorded a slower annual rate of increase at 10.4% during the month.

“In the short-term, we need to boost our recovery momentum, while making sure that the most disadvantaged sectors of the country are assisted. Simultaneously, we need to invest in medium-term solutions to improve productivity, especially in agriculture, and build resilience among consumers and producers,” Balisacan said.

“The government remains committed to taking swift and decisive action to ensure Filipinos can cope with the higher cost of living. This is done by providing targeted subsidies and ensuring unhampered supply of goods and services despite the rising global oil prices,” the NEDA chief added. —KG, GMA News