Inflation in December 2022 accelerated to a more than 14-year high of 8.1 percent from 8 percent in November on faster increases in the prices of food and non-alcoholic beverages, the Philippine Statistics Authority said Thursday.
National statistician and civil registrar general Dennis Mapa said in an online briefing the December outturn was also faster than 3.1 percent registered in December 2021.
This brought the 2022 average inflation to 5.8 percent, beyond the government’s target range of 2 percent to 4 percent for the year.
“This was the fastest inflation since November 2008,” Mapa said, referring to the year when the global financial crisis took place.
Mapa said food and non-alcoholic beverages had an inflation rate of 10.2 percent in December and contributed 38.9 percent to the overall inflation.
BSP Governor Felipe Medalla said earlier inflation was expected to peak in December 2022.
The National Economic and Development Authority said protecting the purchasing power of Filipinos remains the government’s top priority as domestic and global headwinds continue to be a challenge.
It said the continued uptrend in inflation rate was driven by a higher price index for electricity, accounting for 1.0 percentage point, followed by vegetables with 0.9 ppt. Restaurant services also accelerated and contributed 0.7 ppt, while private and public transport contributed a total of 1.0 ppt.
Other key agricultural commodities such as meat and fish contributed 0.8 ppt, while processed food commodities such as sugar and bread and other cereals contributed 0.7 ppt to total inflation.
The faster food inflation was driven by higher prices of vegetables (32.4 percent) and sugar (38.8 percent) amid higher input costs and lower production, as weather disturbances in the previous months disrupted farmers’ planting calendar. In addition, the higher demand due to the holiday season pushed inflation up for restaurant and accommodation services at 7.0 percent.
“As part of the 8-point socioeconomic agenda of the Marcos administration and as laid out in the Philippine Development Plan 2023-2028, the government will continue to prioritize addressing the impact of inflation as it remains to be a challenge not only in the country, but throughout the globe,” said NEDA Secretary Arsenio Balisacan.
He noted the timely decision of President Ferdinand Marcos, Jr. to extend the validity of the reduced import rate duties on various products such as pork, rice, corn, and coal until December 2023.
“Executive Order No. 10, s 2022 will continue to provide diversified sources of food and agricultural inputs in the short term. The operational intervention, however, is to ensure food security by boosting food production, improving farm-to-market connectivity, and investing in disaster resilience, climate adaptation measures, and coordination mechanisms,” said Balisacan.
Enhancing the value chain through digital technology and development of climate-smart farm products will also play an essential role in securing food supply and prices, he said.
“As laid out in PDP Chapter 3, the government will strengthen the establishment of strategically located facilities such as interconnected transport systems, wholesale food terminals and trading centers, and other production and postharvest facilities. Also critical will be complementary private sector investments such as warehouses, cold chains, cold storage facilities, processing facilities, and digital marketing channels, among others,” said Balisacan.
The NEDA chief underscored the need to streamline disaster response and rehabilitation mechanisms to cope with the frequent weather disturbances experienced by the country.
Under the strategy, the government will mainstream the use of technology to predict supply chain disruptions; adopt site-specific, timely and simplified climate outlook and weather forecasts; improve biosecurity measures; and accelerate the development of vaccines to control livestock and poultry diseases.
“There is an urgent need to modernize the country’s agriculture and agribusiness to increase productivity and ensure that there is adequate, affordable and nutritious food on the table of every Filipino,” Balisacan said.