Inflation blows past expectations to 2-year high in January

MANILA, Philippines, February 6 ------ Prices of basic goods and services rose by their fastest level in 2 years in January, overshooting government expectations as the surge in food costs remained unabated. Inflation, as measured by the consumer price index, accelerated to 4.2% year-on-year, the Philippine Statistics Authority reported on Friday. The rate was the fastest in 2 years or since January 2019 when annual inflation averaged 4.4%, and even blew past the Bangko Sentral ng Pilipinas’ forecast range of 3.3-4.1% for the month and the 2-4% target for the year.

The latest data punctuated growing concerns over a slow but sustained quickening of inflation from October when succeeding typhoons hammered down farmlands, destroying crops and tightening supply. A lingering African swine fever, which remains unresolved since 2019, exacerbated the problem after a pork supply shortage that manifested during the holiday season trickled down to this year, prompting price ceilings that many doubted will be effective in controlling prices. As a result, price increases have only accelerated, threatening a fragile economic rebound from the pandemic. On average, meat prices rose 17% year-on-year in January from 10% in December. Vegetable costs rose by a massive 21.2% on average from December’s 19.7%. Even fruits just became costlier, with prices up 9% annually from 6.3% in the previous month.

In Metro Manila, which is largely dependent on vegetable supply from the provinces, residents experienced inflation at 4.3%. Those outside of the area, however, were not so lucky as well, with inflation treading up 4.2% year-on-year. In these areas, pork prices alone were enough to fan inflation. For instance, the cost of pork with bones in Metro Manila rose a big 68% year-on-year in January. Outside the National Capital Region, the same prices rose a slower, albeit still massive, 46%. On the other hand, a 1 kilogram of pork as pure meat now cost 77% more than same period a year ago in NCR, and 45% more outside the capital region.

National Statistician Claire Dennis Mapa said there is still “high probability” for inflation to further gain pace in the coming months if food prices will not get under control. “This is all due to the food commodity group,” he said in Filipino during a virtual briefing.

Source: philstar.com