The rate of inflation dropped to 3.9 percent in December 2023, its slowest pace since February 2022, the Philippine Statistics Authority said Friday as President Marcos vowed that the government would continue to work hard to make the prices of commodities affordable.
In a post on his X social media account, the President said he was pleased by the lower inflation rate in December and said the government continues to work hard to improve the condition of the economy, and to keep food and other basic commodities affordable.
“For the new year, we will further strengthen programs for agriculture and focus on measures to keep the prices of food and other basic commodities affordable,” Mr. Marcos said in Filipino.
Last month’s inflation rate was lower than the 4.1 percent in November and 8.1 percent in December in 2022. It was also the lowest since it settled at 3 percent in February 2022.
Inflation averaged 6 percent in 2023, faster than 5.8 percent in 2022. It was also higher than the target range of 2 percent to 4 percent for the year, but it was within the Development Budget Coordination Committee (DBCC) assumption of 5 percent to 6 percent.
“The downtrend in the overall inflation in December 2023 was primarily brought about by the lower year-on-year growth in the index of housing, water, electricity, gas and other fuels at 1.5 percent in December 2023 from 2.5 percent in the previous month,” the PSA said.
“This was followed by food and non-alcoholic beverages with 5.4 percent inflation during the month from 5.7 percent in November 2023,” it said.
The transport index posted an annual increase of 0.4 percent in December, higher than the annual decrease of 0.8 percent in November 2023.
Inflation for most commodity groups either slowed down or retained their previous rates during the month.
However, rice inflation rose to 19.6 percent during the month from 15.8 percent in November 2023. It was also the most significant contributor to the December inflation rate with 1.7 percentage points (ppt), followed by food and beverages services and housing rentals with 0.5 ppt each.
In a separate statement, the Bangko Sentral ng Pilipinas said the latest inflation rate is consistent with its projections that inflation will likely moderate in the near term due to easing supply-side price pressures and negative base effects.
Still, it said, inflation could go up again because of higher transport charges, increased electricity rates, higher oil prices, and higher food prices due to strong El Niño conditions.
Meanwhile, Arsenio M. Balisacan, secretary of the National Economic and Development Authority (NEDA) emphasized the importance of Executive Order No. 50, which extended the Most Favored Nation (MFN) reduced tariff rates for key agricultural commodities like pork, corn, and rice to ensure sufficient food supply for Filipinos and prevent spikes in prices of these commodities.
Balisacan also noted that the El Niño phenomenon has added to the threat of higher inflation and underscored the need to hasten the full implementation of the El Niño National Action Plan (NAP), which seeks to increase the resilience of communities against the weather phenomenon and guide government agencies in mitigating its immediate effects.
“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.
These strategies, he added, include implementing timely deployment of trade policy tools along with sustained investments in irrigation, flood control, supply chain logistics, and climate change adaptation.