Inflation still top concern for Pinoys

MANILA, Philippines — Despite inflation easing in December, it remains the top concern for many Filipinos as prices of rice, the country’s staple food, continued to pick up, think tank GlobalSource Partners said.

In a report, former Bangko Sentral ng Pilipinas deputy governor Diwa Guinigundo, now country analyst at GlobalSource, said it is not surprising that a majority of Filipinos continued to express concern over inflation, as shown in the December survey of Pulse Asia Research Inc.

Pulse Asia’s survey showed that 72 percent of Filipino adults identified controlling inflation as an urgent national concern.

Guinigundo said the survey also indicated that public opinion on national urgent concerns did not significantly change from that of the previous quarter.

“Filipinos continue to place grave concern about price movements, then and now,” he said.

While inflation slowed down to 3.9 percent in December 2023 and was within the central bank’s two to four percent target range, average inflation for full-year 2023 reached six percent and exceeded the target band.

Guinigundo said food inflation also remained high, with rice inflation rising further to 19.6 percent in December 2023 from 15.8 percent the previous month.

The December 2023 rice inflation is the highest since the 22.9 percent in March 2009.

“With rice being the staple food of most Filipinos, movements in its price significantly affect consumers’ views of the government’s ability to control inflation,” Guinigundo said, adding the same dynamics could have been driven by selected basic items like onions and garlic, and key fuel prices.

He said households and even companies may have also moved out of the so-called zone of “rational inattention.”

Outside of such zone, he said a downtrend in inflation could have limited influence on behavior.

“They could be more attentive to just a few items. This is very true for Filipinos who are attentive to price movements of basic commodities including rice, meat, fuel and utilities,” he said.

In addition, he said respondents could still be focusing on absolute price levels.

“While inflation is showing some easing, price levels continue to be prohibitive especially for the lowest 30 percent of all income households,” he said.

He also cited the Monetary Board’s assessment that upside risks to inflation continue to be dominant, with the El Niño dry spell expected to last through the end of the second quarter this year.

The Pulse Asia survey showed the second most urgent concern cited was increasing workers’ pay (40 percent); followed by creating more jobs (28 percent); reducing poverty (25 percent); fighting graft and corruption (19 percent); assisting farmers and addressing involuntary hunger (both at 18 percent); and fighting criminality (15 percent).

“Clearly the top four urgent concerns are gut issues for the population including the need to help farmers address the issue of involuntary hunger,” Guinigundo said.