Inflation swifter at fresh 14-year high of 8.1% in December 2022 — PSA

Prices of consumer goods and services continued its accelerated trajectory in the last month of 2022, hitting a fresh 14-year high, as food prices remain elevated during the period, data released by the Philippine Statistics Authority (PSA) on Thursday showed.

Inflation or the rate of increase in the prices of goods and services clocked in at 8.1% in December 2022, faster than the 8.0% rate in November 2022 and 3.1% in the same month in 2021.

This is the fastest inflation rate since November 2008’s 9.1%, according to National Statistician and PSA chief Claire Dennis Mapa.

Last month’s figures also fell within the Bangko Sentral ng Pilipinas’ (BSP) projection range of 7.8% to 8.6%. 

The December print brought the year-to-date average to 5.8%, surpassing the government’s ceiling of 2% to 4% but hitting its assumption for the entire year which took into account higher food and transport costs. 

“Ang pangunahing dahilan ng mas mataas na antas ng inflation nitong Disyembre 2022 kaysa noong Nobyembre 2022 ay ang mas mabilis na pagtaas ng presyo ng Food and Non-Alcoholic Beverages,” Mapa said.

(The main reason for the higher inflation rate in December 2022 versus November 2022 was the faster increase in Food and Non-Alcoholic Beverages.)

The PSA chief said the Food and Non-Alcoholic Beverages index had a 10.2% inflation print and a 38.9% share to the overall inflation in the whole country.

“Ang nag-ambag ng malaki sa pagtaas ng inflation ng Food and Non-Alcoholic Beverages ay ang mas mabilis na pagtaas ng presyo ng mga vegetables, tubers, cooking bananas at iba pa… partikular ang repolyo, bigas, at fruits and nuts, tulad ng saging,” Mapa said.

(The major contributor to the higher inflation for Food and Non-Alcoholic Beverages was the faster rise in the prices of vegetables, tubers, cooking bananas among others… particularly cabbage, rice, and fruits and nuts, such as banana.)

Vegetable inflation highest since 1999

In particular, the inflation rate for vegetables, tubers, plantains, cooking bananas and pulses stood at 32.4%.

This is the highest for the index since February 1999, when it hit 44%, according to Mapa.

The PSA chief noted that onions, “which is part of the vegetables (group),” contributed about 0.3 percentage point to the overall inflation “same level as rice.”

Late December, the price of red onions jacked up to over P700 per kilo in some Metro Manila markets amid a local supply deficiency of the commodity.

The vegetables group, along with rice (3.4%), fruits and (7.6%), brought the food inflation to increase to 10.6% in December 2022, from 10.3% in November 2022.

Other commodities in the food basket which saw faster increments were the following:

• Flour, bread and other bakery products, pasta products, and other cereals, 10.9%
• Milk, other dairy products and eggs, 9.9%
• Sugar, confectionery and desserts, 38.8%
• Ready-made food and other food products not elsewhere classified, 9.4%

In a statement, the National Economic and Development Authority (NEDA) pointed to the previous weather disturbances which disrupted farmers’ planting calendar and brought about higher input cost and lower production.

“In addition, the higher demand due to the holiday season pushed inflation up for restaurant and accommodation services at 7%,” the NEDA said.

The second commodity group, which contributed to the faster overall inflation last month, was the index for Restaurants and Accommodation Services which posted an inflation rate of 7% from 6.5%.

This was followed by Housing, Water, Electricity, Gas and Other Fuels with a rate of 7% from 6.9% in the prior month.

Addressing inflation

Socioeconomic Planning Secretary and NEDA chief Arsenio Balisacan said that “the government will continue to prioritize addressing the impact of inflation as it remains to be a challenge not only in the country, but throughout the globe” as part of the Marcos administration’s eight-point socioeconomic agenda and the Philippine Development Plan 2023 to 2028.

Balisacan also welcomed the extension of the validity of the reduced import rate duties on various products such as pork, rice, corn, and coal until December 2023.

“Executive Order No. 10, s 2022 will continue to provide diversified sources of food and agricultural inputs in the short term. The operational intervention, however, is to ensure food security by boosting food production, improving farm-to-market connectivity, and investing in disaster resilience, climate adaptation measures, and coordination mechanisms,” the NEDA chief said.

Likewise, Balisacan said the government will enhance the value chain through digital technology and development of climate-smart farm products will also play an essential role in securing food supply and prices.

The country’s chief economist also highlighted the need to streamline disaster response and rehabilitation mechanisms to cope with the frequent weather disturbances experienced by the country.

Under this strategy, the government will mainstream the use of technology to predict supply chain disruptions; adopt site-specific, timely, and simplified climate outlook and weather forecasts; improve biosecurity measures; and accelerate the development of vaccines to control livestock and poultry diseases.

“There is an urgent need to modernize the country’s agriculture and agribusiness to increase productivity and ensure that there is adequate, affordable, and nutritious food on the table of every Filipino,” Balisacan said.

Inflation in and outside Metro Manila

Tracking the national trend, inflation in Metro Manila also saw an uptick at 7.6%, from 7.5% in November 2022 and 2.1% in December 2021.

Among the commodity groups, restaurants and accommodation services, with 9.5% inflation in December 2022 from 8.8% in the previous month, primarily contributed to the uptrend of inflation in the area.

This was followed by housing, water, electricity, gas and other fuels with 4% inflation in December 2022 from 3.7% in the previous month.

Likewise, areas outside the National Capital Region posted an inflation print of 8.2%, from 8% in November 2022 and 3.4% in December 2021.

The inflation rate in the area was mainly pushed by the faster rise in food and non-alcoholic beverages at 10%, from 9.7%.

Compared with their respective annual growth rates in November 2022, 11 regions in areas outside NCR exhibited higher inflation rates in December 2022.

Among the regions, Region VI (Western Visayas) posted the highest inflation rate of 10.5%, while the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) remained as the region with the lowest inflation at 6.3%.

Bottom 30%

The Philippines’ bottom 30% income households also felt a faster inflation at 7.9% in December 2022, from 7.7% in November 2022 and 3.3% in December 2021.

The uptrend in the inflation for the income group was mainly due to higher increase in food and non-alcoholic beverages at 8.4%, from 8.2% —similar with the overall national trend. — RSJ, GMA Integrated News