MANILA, Philippines — Despite increased holiday demand, inflation in the Philippines eased for the third month, mainly due to slower rises in utility expenses and essential food prices.
During a press briefing on Friday, National Statistician and Philippine Statistics Authority chief Claire Dennis Mapa said that inflation dropped to 3.9% in December 2023, down from 4.1% in November of last year.
Mapa linked the slower inflation to lower growth in housing, utilities (like water, electricity, and gas) by 1.5%, and a decrease in food prices to 5.4% from November's 5.7%.
For three months straight, the country's inflation has dropped, hitting 4.9% in October 2023 and further declining to 4.1% in November 2023. Mapa noted this as the slowest inflation rate since February 2022.
December's inflation falls within the forecasted range of 3.6% to 4.4% by the Bangko Sentral ng Pilipinas. Yet, the year-to-date inflation at 6% remains above the government's target range of 2% to 4%.
Core inflation dropped to 4.4% in December 2023, lower than the previous month's 4.7% and significantly less than December 2022's 6.9%. The average core inflation rate for 2023 is 6.6%.
Inflation among the bottom 30% income households reached 5.0%, slightly up from November's 4.9% but notably lower than December 2022's 9.4%.
BARMM recorded the highest inflation among all regions at 6.2%, while Region 2 had the lowest at 1.6%.
The country's food inflation dropped to 5.5% from 5.8% in November 2023, marking a decrease from December last year, which stood at 10.6%.
The PSA credited the decline to the year-on-year decrease in vegetables, tubers, plantains, cooking bananas, and pulses by 9.2%, alongside a marginal decrease of 0.2% in meat and other parts of slaughtered land animals.
However, rice inflation soared to 19.6%, a significant rise from November 2023's 15.8%, reaching its highest level since March 2009 at 22.9%.
National Economic and Development Authority chief Arsenio Balisacan emphasized the significance of Executive Order No. 50, which prolonged the reduced tariff rates under the “Most Favored Nation” status for crucial agricultural commodities such as pork, corn, and rice to ensure that there will be no shortage in the food supply.
“While our medium-term objective to boost agricultural productivity remains, it is important to augment domestic supply to ease inflationary pressures on consumers, particularly those in low-income households,” he said in a statement.
Balisacan also pointed out that the El Niño phenomenon could be a threat to higher inflation. The country’s central bank previously warned about the weather phenomenon which can affect the country’s food supply.
“We must remain vigilant in monitoring the prices of our commodities and continue to implement strategies to address short-term and long-term inflation-related challenges,” Balisacan said in a statement.
In another statement, the Bangko Sentral ng Pilipinas said it would maintain a "sufficiently tight" monetary policy, considering the ongoing inflation risks.
“Key upside risks are associated with potential pressures from higher transport charges, increased electricity rates, higher oil prices, and higher food prices due to strong El Niño conditions,” the central bank said.