Philippines misses 2021 inflation target

Consumer prices in the Philippines grew faster than the government target in 2021 even as inflation continued to decelerate in December, official data released Wednesday revealed.

Data from the Philippine Statistics Authority (PSA) showed that inflation clocked in at 3.6% in December, which compares with the 4.2% in November and the 3.5% in December 2020.

Contributors to the downward trend are alcoholic beverages and tobacco; clothing and footwear; furnishing, household equipment and routine house maintenance; health; transport; recreation; and restaurant and miscellaneous goods.

This brought the average to 4.5% in 2021, up from 2.6% in 2020 and higher than the government’s target range of 2% to 4%. The latest annual print is also the highest in three years since the 5.2% in 2018.

“Itong contributor talaga sa 2021, nakikita naman natin doon sa previous reports at ito, ‘yung presyo ng meat particular ang pork, ito ay talagang mataas although nagde-decelerate in the previous months. Pero for the whole year, ito ang isa sa malaking contributor,” National Statistician Claire Dennis Mapa said in a virtual briefing.

[The main contributor in 2021, as seen in previous reports and in this one, is the prices of meat, particularly of pork. While this has been decelerating in the previous months, it has been a major contributor for the whole year.]

Meat prices climbed by 4.7% month-on-month in December, and 14.2% year-on-year, which Mapa attributed to the pickup in demand amid the holiday season.

Broken down per region, inflation in Metro Manila slowed to 2.8% in December from 2.9% the previous month and 3.2% in December 2020. This brought the average annual inflation to 3.5%.

In areas outside the National Capital Region (NCR), the average stood at 3.9% in December, higher than the 3.7% the previous year and 4.5% the previous month.

Compared with their 2020 annual average rates, all regions outside the NCR posted higher annual average inflation, with the fastest in the Bicol Region with 6.6%, and the lowest in Central Visayas with 2.5%.

Moving forward, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno warned that an uptrend is likely in the short term due to the onslaught of Typhoon Odette (international name: Rai) in the Visayas and Mindanao regions.

“The supply disruptions and agricultural damages from Typhoon Odette will likely result in a temporary uptick in the prices of food items and other necessities over the near term,” he said in a post on Twitter.

The supply disruptions and agricultural damages from typhoon Odette will likely result in a temporary uptick in the prices of food items and other necessities over the near term.

— Benjamin Diokno (@GovBenDiokno) January 5, 2022

“As with previous episodes of natural disasters, the effective implementation of non-monetary government intervention measures to ensure adequate domestic food supply must be sustained in order to mitigate potential supply-side pressures on inflation,” he added.

In the same briefing, Mapa noted that the PSA will start using 2018 as a base year for the consumer price index starting with the January 2022 to be released next month.

“Ginagawa ito ng PSA regularly para lang makita natin ang presyo ng mga binibili talaga ng average households. Through time, nagbabago ‘yung ating binibili at kailangan natin itong i-capture sa pag-track ng inflation rate,” he said.

“Ina-update namin in other words ‘yung consumptions ng ating households over time,” he added.

[The PSE regularly rebases to reflect the buying patterns of average households. Through time, buying trends change and this needs to be captured through tracking the inflation rate. In other words, we update the consumption of households over time.]

Under the new base year, food and non-alcoholic beverages will still be the top-weighted index at 37.35%, but lower than the 38.34% weight in the previous base year.

Also among the notable changes is the increase in the weight of restaurant and accommodation with 9.62%, up from 8.05%. —KG, GMA News