Inflation rate in January eased to a 15-month low of 3 percent from 3.2 percent in December, on slower increases in the prices of housing, water, electricity, gas, and other fuels, the Philippine Statistics Authority said Friday.
The latest inflation figure, based on base year 2018, was lower than 3.7 percent registered in the same month last year and was also the slowest since November 2020. The PSA rebases the inflation series every six years. Starting January, the inflation series was rebased to 2018 from 2012 to ensure that inflation captures the most relevant basket of goods and services which better reflect the consumption pattern of the average Filipino household.
Bangko Sentral ng Pilipinas said the latest inflation was consistent with expectations that it would decelerate further in the coming months, reverting back to the target range of 2 percent to 4 percent over the policy horizon.
“Given a manageable inflation outlook, the BSP sees ample scope to keep a patient hand on its various policy levers, while keeping an eye on potential risks to inflation and the financial system. The BSP stands ready to respond to emerging developments in keeping with its primary mandate to promote price and financial stability conducive to sustainable economic growth,” the BSP said.
It said the Monetary Board would review its assessment of the inflation outlook along with the latest gross domestic product data in its monetary policy meeting on Feb. 17.
Economic Planning Secretary Karl Kendrick Chua cited the importance of stabilizing livestock stock to keep inflation rate manageable.
“While we move for the extension of Executive Order Nos. 133 and 134 to increase local supply and ensure regular unloading of stocks, we also call for the timely passage of the proposed Livestock Development and Competitiveness bill to boost the productivity of the livestock sector and value chain,” he said.
Among the major provisions of the LDC bill is the updating of the corn industry roadmap, along with the establishment of competitiveness enhancement funds for the components of the livestock value chain. Chua said this could cover corn farmers. As corn is used as animal feeds for livestock, poultry, and fish, this could also help address fish inflation, which remained elevated at 6.2 percent in January.
“We are taking a more proactive approach in promoting the development and competitiveness of corn. We are doing this to help ease prices of sources of protein such as meat and fish, which are still among the top drivers of our country’s overall inflation,” Chua said.
The PSA said the slowdown in the overall inflation was mainly due to the slower annual increase in housing, water, electricity, gas and other fuels at 4.5 percent in January from 5.1 percent in December 2021.
Contributing to the downtrend was the lower annual increments registered in the indices of alcoholic beverages and tobacco, 5.6 percent; housing, water, electricity, gas, and other fuels, 4.5 percent; health, 3.1 percent; recreation, sport and culture, 1.5 percent; education services, 0.6 percent; and restaurants and accommodation services, 3.0 percent.
Annual increases were higher in the indices of clothing and footwear, 2.0 percent; furnishing, household equipment and routine household maintenance, 2.4 percent; transport, 7.0 percent; information and communication, 0.7 percent; and personal care, and miscellaneous goods and services, 2.2 percent.
The indices of food and non-alcoholic beverages, and financial services retained their previous month’s annual growth rates of 1.6 percent and 43.3 percent, respectively.
Food inflation remained at 1.6 percent at the national level in January, compared to 6.4 percent a year ago.
By food group, the annual growth rate of the corn index accelerated to 27.7 percent in January from 16.5 percent in December. Annual upticks were higher in the indices of flour, bread and other bakery products, pasta products, and other cereals, 2.7 percent; milk, other dairy products, and eggs, 0.9 percent; oils and fats, 8.5 percent; sugar, confectionery and desserts, 2.8 percent.
The annual growth rate of the index of rice went up to 1.0 percent in January from -0.1 percent in December, while fish and other seafood retained the previous month’s annual rate of 6.2 percent. The rest of the food groups either had a slower annual hike or negative annual growth rates during the month.
Based on the 2018 inflation series, full-year 2021 inflation was 3.9 percent, which lies within the target range of the Bangko Sentral ng Pilipinas.
