Philippine inflation falls to 20-month low of 4.1%

Inflation rate in the Philippines fell to a 20-month low of 4.1 percent in November from 4.9 percent in October, driven by slower increases in the prices of food and non-alcoholic beverages, the Philippine Statistics Authority (PSA) said Tuesday.

The PSA data showed that this was the slowest inflation rate since March 2022, when it settled at 4 percent.

National Statistician Dennis Mapa said the November inflation rate was also lower than the 8 percent recorded in November 2022.

“This brought the average inflation rate from January to November 2023 to 6.2 percent,” Mapa said.

Mapa said the decline in the overall inflation rate in November was mainly due to the lower year-on-year growth rate of the heavily weighted food and non-alcoholic beverages index, which stood at 5.7 percent in November from 7.0 percent in October.

The transportation index also contributed to the decline, with an annual decrease of 0.8 percent from 1.0 percent annual growth in October. The restaurants and accommodation services index also saw a slower inflation rate of 5.6 percent in November from 6.3 percent in the previous month.

The average inflation rate in the first 11 months remained above the government’s target range of 2 percent to 4 percent for the entire year.

The National Economic and Development Authority (NEDA) said the further drop in the inflation rate could be attributed to the timely implementation of strategies to stabilize food supply amid the anticipated domestic and external headwinds in the coming months.

NEDA Secretary Arsenio Balisacan said the government needs to continue monitoring the inflation situation in the face of continued price pressures coming from geopolitical tensions and extreme weather situations, further fueling uncertainty.

“With the right interventions in place, including the proper and timely deployment of trade policy, we are confident that we can effectively manage inflation and prevent unnecessary upticks in prices of goods and commodities to safeguard the purchasing power of Filipino families, especially those from the most vulnerable sectors,” NEDA Secretary Arsenio Balisacan said.

The country’s chief socioeconomic planner said the government needs to continue monitoring the inflation situation in the face of continued price pressures coming from geopolitical tensions and extreme weather situations, further fueling uncertainty.

Balisacan said to ensure sufficient supply and stable  prices of rice, the Inter-Agency Committee on Inflation and Market Outlook (IAC-IMO) sub-committee on food inflation has proposed to maintain the lower tariff rates on rice, corn and swine meat. At the same time, differentiated support must be provided to agricultural producers, depending how and when they will be affected by El Niño. Measures to reduce transport and delivery costs are being undertaken as well.

Based on the latest monitoring by the Philippine Atmospheric, Geophysical and Astronomical Services Administration’s (PAGASA), a strong El Niño is already present in the country and is projected to intensify in the coming months until the second quarter of 2024. This could bring below-normal rainfall across the country and disrupt food production and energy generation.

Balisacan added that the Toll Regulatory Board and the Department of Agriculture, along with other agencies and tollway concessionaires, are finalizing the details on exempting agriculture delivery trucks from toll increases to mitigate energy- and fuel-related inflationary pressures.

Meanwhile, the Land Transportation Franchising and Regulatory Board has provided fuel subsidies to 166,598 public utility vehicles as of Nov. 17.

To protect the most vulnerable sectors from high food prices, the Department of Social Welfare and Development launched the Walang Gutom 2027: Food Stamp Program, which provides monetary assistance to low-income households and allow them to purchase selected food commodities from eligible merchants.

“Effective implementation of these programs is crucial to minimize the impact of high  prices on low-income households. The government is also implementing strategies and programs to improve local food production and supply and  boost the productivity of our farmers by investing in irrigation, flood control, supply chain logistics, and climate change adaptation,” Balisacan said.