Inflation eases to 3.6 percent in December, lowest level in 2021

MANILA, January 5 ------ Inflation eased in December to its lowest level in 2021 due to the slower price movements of some basic food items, the state statistics bureau said Wednesday. Inflation was at 3.6 percent last month, slower compared to the 4.2 percent in November, the Philippine Statistics Authority said. This was within the government target of 2 to 4 percent, and the Bangko Sentral ng Pilipinas' projection of 3.5 to 4.3 percent. Average inflation for the year was at 4.5 percent, National Statistician Dennis Mapa said.

The slower food inflation number was surprising given the damage brought by typhoon Odette, ING Philippines Senior Economist Nicholas Mapa told ANC. “Perhaps the authorities did not include inflation in areas stricken by super typhoon Odette…The print is the first time inflation falls below 4 percent but still not enough to keep the full-year inflation within the BSP’s target band,” Mapa said.

An uptick in inflation is likely to occur in the near term due to the disruptions by typhoon, BSP Gov. Benjamin Diokno said. Estimates will be included once data becomes available, he said. "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," the governor said. "The implementation of reconstruction efforts and rehabilitation programs in areas damaged by the storm will be essential to support economic recovery and prevent job losses," he added.

The BSP earlier raised its inflation forecast for 2022 to 3.4 percent from 3.3 percent, within the government target band. Average inflation is also expected to settle in the mid-range of the target in 2022 and 2023, Diokno said. The BSP said it would maintain its target inflation rate of 2 to 4 percent until 2024.

Source: news.abs-cbn.com