MANILA, Philippines — Consumer price growth quickened in January on the back of higher food prices during the month, the Philippine Statistics Authority reported Wednesday.
Inflation last month stood at 2.9%, faster than December’s 2.5% but softer than 4.4% recorded in January 2019.
“The heavily-weighted food and non-alcoholic beverages index, which registered an annual increment of 2.2%, primarily contributed to the uptrend of inflation in January 2020,” the PSA said.
ING Bank in Manila, whose estimate matched the official January inflation data, said the spike in food prices was due to crop damage from the twin storms in December and a volcanic eruption last month.
“January saw sustained disruption to the supply chain as run-off effects from the twin storms and damage from a January volcanic eruption, which will undoubtedly push food inflation higher,” ING Bank senior economist Nicholas Mapa said.
“Meanwhile, transport prices will see a slight uptick in prices on the third tranche of the fuel excise tax that was implemented, although lower global crude oil prices muted most of the impact,” he added.
Since becoming central bank governor, Benjamin Diokno has given the economy a shot in the arm with a cumulative 75-basis point rate cut in 2019 and a 400-basis point reduction in bank reserves.
Diokno said that the central bank still has some room to resume its monetary policy easing in 2020, but it won’t be as aggressive as last year. — Ian Nicolas Cigaral