Inflation rate up to 2.9% in December 2024 —PSA

The inflation rate in December 2024 increased to 2.9% from 2.5% in November 2024, the Philippine Statistics Authority (PSA) said Tuesday.

In a press conference, National Statistician and PSA chief Undersecretary Claire Dennis Mapa said the increase in December 2024 inflation — which measures the rate of increase in the prices of goods and services — is due to price hikes in electricity, housing rentals, and LPG, accounting for 56.2% of increase.

On the other hand, the increase in prices of transportation, namely gasoline, diesel and passenger transport by sea, contributed to the increased December 2024 inflation rate by 46.9%.

The inflation for passenger transport cost by sea exponentially rose to 71.9% from 17.1% in November, while the inflation for LPG reached 7.8%.

"This [passenger transport cost inflation hike] is seasonal [in December where people travel for the holiday season]. The rental inflation is at 2.4% compared with 2.2% in November 2024. Of course, there are changes in contract [for renewal]. These include studio types, one bedroom, two bedrooms," Mapa said.

"The good news is the inflation rate on rice is going down," he added.

Mapa was referring to the inflation rate on rice, the staple food of the country, which only reached 0.8% in December 2024 or the lowest since January 2022.

Still, the inflation of food and nonalcoholic beverages reached 3.4% or higher than the overall inflation rate of 2.9% due to higher inflation in vegetables, particularly tomatoes, which amounted to 14.2%.

The inflation for meat and other parts of slaughtered land animals, particularly chicken, also posted a 4.9% inflation or higher than the December 2024 overall inflation rate.

Annual rate

However, the 2.9% inflation in December 2024 lowered the country's annual average inflation rate in 2024 to 3.2% or well within the government's target range of 2 to 4%.

PSA's Mapa said that the lower annual average inflation rate of 3.2% was due to lower inflation for food and non-alcoholic beverages which went down to 4.4% in 2024 from 7.9% in 2023.

National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan, in a separate statement, said the 3.2% average inflation rate in 2024 is a significant improvement from the 6% in 2023.

"Despite the risks we encountered throughout the year, our combined efforts to temper inflation have largely been successful. We will build upon this momentum as we commit to keep the inflation rate within our target range in 2025," Balisacan said.

Earlier, the Development Budget Coordination Committee announced during its December 2, 2024 meeting that the government's annual inflation target of 2% to 4% will remain from 2025 to 2028.

Balisacan said that given the targets, the government will continue to pursue measures to ensure adequate food supply and affordable prices such as expanding the reach of its Local Adaptation to Water Access (LAWA) and Breaking Insufficiency through Nutritious Harvest for the Impoverished (BINHI) projects to 323 cities and municipalities across 67 provinces by 2025.

The NEDA chief said that the recent amendment of the Agricultural Tariffication Law under Republic Act No. 12078 is also expected to enhance the rice sector's resilience as the funds allocated for the Rice Competitiveness Enhancement Fund increased to P30 billion from P10 billion annually until 2031.

In support of the hog industry's recovery, the NEDA-chaired Inter-agency Committee on Inflation and Market Outlook and the Economic Development Group has also recommended that the Department of Agriculture facilitate the timely and continuous withdrawal of frozen pork stocks in cold storage and for the Food and Drug Administration to fast-track the approval of African Swine Fever vaccines for commercial use.

The Energy Regulatory Commission, for its part, has directed all private distribution utilities, including the Manila Electric Company or Meralco, to refund unspent regulatory reset fees collected from consumers.

The total refund is estimated at P1.18 billion.

"As we enter 2025, we remain optimistic about curbing inflation through strategic, timely, and proactive measures. At the same time, we are intensifying efforts to improve productivity, encourage innovation, and build resilience toward ensuring food security and protecting consumers' purchasing power," Balisacan added. —KG, GMA Integrated News