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Inflation slowed down to 8.6% in February — PSA

Inflation or the rate of increase in the prices of goods and services moderately slowed down in February, thanks to the slower movement in transportation and fuel costs, the Philippine Statistics Authority (PSA) reported on Tuesday.

“Ang headline inflation o ang pagtaas ng presyo ng mga produkto at serbisyo sa bansa ay bumagal sa antas na 8.6% nitong Pebrero 2023,” National Statistician and PSA chief Claire Dennis Mapa said at a virtual press conference.

(The headline inflation or the rate of increase in the prices of products and services in the country decelerated to a rate of 8.6% in February 2023.)

Year-to-date inflation print stood at 8.6%, according to the PSA chief.

Last month’s inflation rate was slower than the 8.7% print recorded in January 2023– the highest since the 9.1% recorded in November 2008. 

February’s inflation rate was higher than the 3% inflation rate posted in the same month last year.

The 8.6% inflation last month also falls within the Bangko Sentral ng Pilipinas’ (BSP) forecast range of 8.5% to 9.3%.

“Ang dahilan ng pagbagal ng antas ng inflation nitong Pebrero 2023 kaysa noong Enero 2023 ay ang mas mabagal na paggalaw ng presyo ng transport,” Mapa said.

(The reason for the slowing inflation in February 2023 compared to January 2023 was the slower movement in transport prices.)

In particular, the PSA chief said the slowdown in the Transport index was due to the slower increase in the price of gasoline, diesel, and motorcycles. 

Gasoline prices slowed down with 3.8% inflation last month from 9.6% in the prior month.

Diesel inflation also eased to 14.2% print from 30.5%, motorcycles posted 2.7% print from 3.5% in the prior month.

Mapa said that among the 13 commodity groups, Transport was the “sole driver” of the downward movement of the February 2023 overall inflation as it recording a 9% inflation rate from 11.1% in January 2023.

Meanwhile, nine commodity groups showed higher inflation rates during the period:

  • Food and Non-alcoholic Beverages at 10.8% from 10.7%
  • Alcoholic Beverages and Tobacco at 11% from 10.9%
  • Clothing and Footwear at 4.8% from 4.4%
  • Furnishings, Household Equipment and Routine Household Maintenance at 6.2% from 5.2%
  • Health at 4% from 3.3%
  • Information and Communication at 0.8% from 0.7%
  • Recreation, Sports and Culture at 4.4% from 4.2%
  • Restaurants and Accommodation Services at 8.1% from 7.6%
  • Personal Care, and Miscellaneous Goods and Services at 5.3% from 5%

The indices of Housing, Water, Electricity, Gas, and Other Fuels and Education Services retained their January 2023 inflation rates in February 2023 at 8.6% and 3.6%, respectively.

The Financial Services index, on the other hand, continued to record zero annual rate.

Mapa also reported that Food inflation slightly slowed down to 11.1% from 11.2% in February versus January.

In February last year, Food inflation was recorded at 1.1%.

Despite the slower Food inflation, Food accounted for 1 percentage point to the overall inflation print in February 2023.

“We must rethink our strategies to combat rising food prices. The country’s current high inflation is largely driven by domestic, supply-side constraints. Agricultural imports were ill-timed and food supplies have been inadequate. The solution is to get to the root of the problem, including fixing the bottlenecks along all segments of the agricultural value chain,” National Economic and Development Authority Secretary Arsenio Balisacan said in a separate statement.

“We recommend the urgent creation of a high-level inter-agency committee to advise the President and the Cabinet on measures to keep food prices stable and ensure food security for all Filipinos, especially the poor whose expenditures are largely constituted by food. We must immediately address this issue if we are to remain on track to meeting our poverty reduction targets for the medium term,” Balisacan added.

The NEDA chief said that the government “continues to implement calibrated and swift measures to arrest inflation and its impact, including addressing supply issues especially in food products, providing targeted cash transfers and social protection programs to the most vulnerable sectors of the society, and ensuring access to affordable and reliable energy sources.”

“These short-term assistance programs will be complemented by productivity- and efficiency-enhancing measures in the medium term, as outlined in the Philippine Development Plan 2023-2028,” Balisacan said.

Amid the still high inflation trend, the government is preparing to launch another round of cash aid under the Targeted Cash Transfer (TCT) program to help ease consumers’ burden

Under the proposed cash aid program, some 9.3 million “poorest of the poor” will receive P1,000 which will be divided for distribution for two months. — RSJ, GMA Integrated News