THE country’s headline inflation rate further accelerated to 8.7 percent in January 2023 from 8.1 percent in December 2022, the Philippine Statistics Authority announced Tuesday, Feb. 7, 2023.
This January 2023 inflation is the highest annual rate recorded since November 2008 and is higher than the Bangko Sentral ng Pilipinas’ projection of 7.5 to 8.3 percent.
“As part of the administration’s eight-point agenda and the Philippine Development Plan 2023-2028, the government is implementing measures to ease price pressures and cushion the impact of inflation, especially on basic commodities,” said National Economic and Development Authority (Neda) Secretary Arsenio Balisacan in a statement.
Electricity and vegetables, particularly onions, were the top contributors to January inflation, each accounting for 1.1 percentage points. Restaurant services and house rentals also accelerated and contributed 0.7 and 0.6 percentage points, respectively.
Public and private transport contributed a total of one percentage point. Other key agricultural commodities such as meat and fish contributed a total of 0.8 percentage points, while processed food commodities such as sugar and bread and other cereals contributed a total of 0.7 percentage points to total inflation.
Central Visayas inflation
Inflation in Central Visayas slowed down to 7.2 percent from 8.5 percent in December 2022. Western Visayas logged the highest inflation at 10.3 percent, followed by Davao Region at 9.4 percent and Ilogos Region at 9.3 percent.
Charles Kenneth Co, president of Cebu Chamber of Commerce and Industry, when sought for comments thinks inflation will continue to be high. But he noted that there is hope with oil and coal starting to trend downwards.
Co also noted that food prices are still waiting for fertilizer, wheat and soybean supplies to normalize depending on the war in Ukraine.
“Factories have no choice but to pass on the higher cost to consumers so we expect demand to be weaker for discretionary goods,” said Co.
“Business will have to be cautious about their expansion plans considering various economic factors especially with interest rates still climbing to quell inflation,” he added.
The Neda chief said the government has identified measures to keep food price movements consistent with the government’s inflation and food security objectives.
Short-term measures include augmenting supply such as through temporary easing of import restrictions, price monitoring and targeted social support.
In the medium to long term, the priority consists of ensuring food security through higher agricultural productivity and ensuring energy security by pursuing the energy transition and development program.
“Our measures are meant to balance the interests among local food producers, consumers, and the overall economy,” Balisacan said.
The economic managers expect inflation to moderate from 2023 to 2024, with a slower-than-expected global recovery and waning pent-up domestic demand.
Moreover, the impact of BSP policy rate hikes is anticipated to be felt this year.