Inflation eases to 2.8 percent in January

Lowest in over 3 years

MANILA, Philippines — Driven mainly by the slower increases in food prices, inflation eased further to 2.8 percent in January, according to the Philippine Statistics Authority (PSA).

In a press briefing, National Statistician Dennis Mapa said headline inflation, or the rate of increase in the average prices of goods and services typically purchased by consumers, slowed to 2.8 percent in January from 3.9 percent in December 2023. Inflation was recorded at a sizzling 8.7 percent in January last year.

Mapa said the January inflation print is the lowest in more than three years or since the 2.3 percent recorded in October 2020.

The January inflation rate is within the Bangko Sentral ng Pilipinas’ forecast range of 2.8 to 3.6 percent for January.

Driving the downtrend in the inflation rate was the slower increment in food and non-alcoholic beverages, at 3.5 percent in January from 5.4 percent a month ago.

Inflation for food alone was at 3.3 percent in January, lower than the 5.5 percent in December last year.

Food prices are expected to improve this year, but some “upside risks” will remain, House committee on ways and means chairman Joey Salceda said.

According to Salceda, this year’s food prices will likely be better than in 2023 and this will have “positive effects on economic growth and real wages.”

Mapa said the January food inflation rate is the lowest since the 2.8 percent in March 2022.

While food inflation eased, rice inflation increased further to 22.6 percent in January this year from 19.6 percent in December 2023.

Mapa said the January rice inflation rate is the highest since March 2009 when it hit 22.9 percent.

He attributed the increase in the January inflation rate to the high world market prices and to low base effects, with rice inflation posting lower rates from January to July 2023.

“Our expectation is we will have rice inflation of 20 percent or higher until around July,” Mapa said.

Given the latest inflation result, National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said the Inter-Agency Committee on Inflation and Market Outlook would continue to closely monitor the prices of rice and other goods to be able to recommend appropriate policies to President Marcos to ensure that commodity prices are affordable.

With the El Niño expected until May, he said, “we introduce stop-gap measures, as necessary, such as allowing further imports on key commodities until our supply stabilizes at prices affordable to consumers while ensuring remunerative prices for local producers.”

Earlier, the President issued Executive Order 50, which extends the implementation of reduced tariff rates for pork, corn, and rice until the end of this year.

Balisacan said the Department of Agriculture would continue to monitor the situation and guide the government in addressing food production concerns.

He also said the Department of Social Welfare and Development would expand its National Food Stamp program to cover 300,000 households to help the most vulnerable families during the El Niño season.

Commenting on the data, Oikonomia Advisory and Research Inc. president and chief economist John Paolo Rivera said there are indications that inflation is already on a sustained downward trend.

“Assuming no significant disruptions happen in the next months and interest rates will not decrease abruptly, this downward trend may continue,” he said. — Sheila Crisostomo