THE country’s inflation rate continued to slow down for the third straight month in November.
The Philippine Statistics Authority on Tuesday, December 7, 2021, reported that the headline inflation rate further eased to 4.2 percent in November from 4.6 percent in October.
But this was slightly higher than anticipated, settling above the Bangko Sentral ng Pilipinas’ (BSP) forecast range for the month at 3.3 to 4.1 percent. The year-to-date average inflation of 4.5 percent, points to a breach of the inflation target of 2021, BSP Gov. Benjamin Diokno said in a tweet.
“Nonetheless, average inflation is still projected to fall within the government’s target range in 2022 and 2023 as supply side pressures moderate. The risks to the inflation outlook are on the upside for 2022 but remain broadly balanced for 2023,” Diokno said.
The decline in inflation was driven by the slowdown in inflation for food to 4.1 percent in November from 5.6 percent in October.
In particular, vegetable inflation turned negative at -1.8 percent in November from 11.4 percent in October. Fish inflation also dropped to 7.9 percent from 9.5 percent in the same period. Meat inflation likewise decreased to 10.7 percent from 11.9 percent, while pork inflation decreased to 17.3 percent from 23.3 percent.
Non-food inflation
Meanwhile, non-food inflation slightly rose to 4.1 percent from 3.8 percent for the same period. The main driver was high international crude oil prices, which drove up transport inflation to 8.8 percent from 7.1 percent. This was also reflected in the higher inflation seen in housing, water, electricity, gas and other fuels at 4.6 percent from 4.4 percent.
To support qualified public utility jeepney operators amid high oil prices, the Land Transportation Franchising and Regulatory Board has started distributing cash grants worth P1 billion through its Pantawid Pasada Program. As of November 24, around 78,000 out of 136,000 target beneficiaries have received fuel subsidies.
The government has also increased the passenger capacity for public utility vehicles (PUVs) from 50 percent to 70 percent in areas under Alert Level 2 to increase mobility and help PUV drivers earn more.
The National Economic and Development Authority recommends further increasing passenger capacity to up to 100 percent for all transport types as vaccination rates increase.
“As restrictions ease, we recommend increasing public transport capacity to 100 percent as vaccination rates increase to reduce crowding in terminals and help protect commuters and drivers from future oil price shocks,” said Socioeconomic planning Secretary Karl Kendrick Chua.
Upside risks
Meanwhile, Diokno said, “Upside risks are mainly linked to the potential impact of weather disturbances on the prices of key food items and the possibility of a prolonged recovery of domestic food supply.”
He also noted that “strong global demand amid persistent supply-chain bottlenecks could also exert further upward pressures on international commodity prices.”
He also mentioned that potential delays in the lifting of domestic lockdown measures as well as the emergence of more transmissible Covid-19 variants could dampen the prospects for both global and domestic demand and temper inflationary pressures.
“Looking ahead, the BSP stands ready to maintain its accommodative monetary policy stance to support the economy’s recovery while also guarding against any emerging risks to its price and stability objectives,” said Diokno.