Inflation cools further to 4.1% in November 

MANILA, Philippines —  Consumers enjoyed some slight inflation relief in November after prices rose at a slower pace compared to the previous month, but persistent high inflation of rice and dairy products could still hurt Filipino buyers heading into the holiday season.

At a press briefing on Tuesday, the Philippine Statistics Authority (PSA) said that inflation eased further to 4.1% in November — a slight dip from the 4.9% recorded in October and slower than the 8.8% inflation rate reported in November 2022.  

Tuesday’s readout falls within the lower range of the Bangko Sentral ng Pilipinas’ month-ahead forecast for November (4.0% to 4.8%). But inflation year-to-date (or since the start of the year) stands at 6.2% — far outside the government’s target range of 2% to 4%.   

This latest print marks the second consecutive month that inflation has slowed after soaring rice prices drove inflation to quicken to a four-month high in September before dropping back down in October.  

The PSA said the deceleration in November’s inflation rate can be attributed to the slower rise in the price of vegetables and other food and alcoholic beverages  — which recorded a 5.8% inflation rate from last month’s 7.0% — and a slight dip in the inflation of fuel costs.

November's food inflation is also the lowest since May 2022 (5.2%), PSA Undersecretary Dennis Mapa noted.

Mapa said that the marked slowdown in the price of vegetables can be explained by the absence of weather disturbances that cause short-term supply shocks. Based on a year-on-year comparison, there was also a higher-than-normal inflation rate for vegetables in November 2022. 

Meanwhile, prices of rice and dairy products rose compared to the previous year, with rice inflation quickening to a 15.8% rate year-on-year (from 13.2%) and milk, other dairy products and eggs rising to 7.6% from 7.5%.

Notably, core inflation—which strips out volatile food and gas costs — cooled to 4.7% from October’s 5.3%, suggesting underlying price pressures may be easing.

November’s rate is also the year’s lowest, dipping below July’s 4.7%. 

Mapa added that rice inflation peaked in September at 17.9% and dipped slightly in October before climbing back up in November. 

"We saw that in the first two weeks, rice prices rose, and this increase continued in the next weeks. This explains the increase in November after a slowdown in October," he said in a mix of English and Filipino.

Mapa added that prices of regular, well-milled and special rice increased across the board month-on-month, driving up rice inflation. 

Easing by Q1 of 2024

The Washington-based International Monetary Fund (IMF) has forecasted that inflation in the Philippines would ease within the 2-4% target by the BSP around the first quarter of 2024 instead of the last quarter of 2023 — an estimation that comes as global supply chains of basic commodities like oil continue to strain from the escalation of wars.

The BSP earlier tweaked its forecasted inflation for 2023, raising it to 5.8% from 5.6%. It also revised its estimated inflation for 2024, settling for 3.5% from 3.3%.

Earlier in November, the BSP announced that it is keeping a steady policy hand after it left policy rates unchanged, maintaining that despite improvements in food supply chains, higher transport charges and electricity rates may pose significant price pressures.