The rate in consumer prices accelerated further in December 2020, driven by higher costs of food items, transportation as well as other goods and services, data from the Philippine Statistics Authority showed.
The country’s headline inflation clocked in at 3.5 percent last month, up from 3.3 percent in November and 2.5 percent in December 2019.
The latest reading is the fastest pace in more than a year and marked its fourth straight month of uptrend.
The December inflation brought the country’s full-year average to 2.6 percent, slightly higher than the 2.5 percent seen in the previous year, but well within the government’s target for 2020 of 2.0 percent to 4.0 percent.
“Even with the low inflation environment, there is still a need to improve supply chain efficiency to ensure that prices of essential goods and services remain stable,” Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said in a statement.
The faster inflation in December was mainly driven by the increase in the price indices of food and nonalcoholic beverages, transport, as well as restaurant and miscellaneous goods and services.
Among the sub-groups, prices of vegetables and meat significantly increased from the previous month.
Chua said the faster inflation in agricultural products could be traced to lower production following the damage caused by previous typhoons.
Meanwhile, he said meat inflation inched up for the third consecutive month owing to the decline in domestic swine production due to the African swine fever.
Chua emphasized the need to establish processing facilities that will prevent wastage and spoilage of farm harvests, such as the Benguet Agri-Pinoy Trading Center in the Cordillera region where a large part of the country’s supply of vegetables is sourced.
He also underscored the need to set up additional cold storage facilities, warehouses, and post-harvest centers that will further improve supply management in the agriculture sector, especially in times of natural disasters or when there are surplus in harvest.
Furthermore, online platforms such as the various Kadiwa ni Ani at Kita modalities as well as the recently launched Deliver-E – a new digital platform that directly links buyers to producers –will also help address issues on logistics.
Aside from the ongoing pandemic, Chua also said the country has been facing adverse weather conditions in recent months.
Based on the latest climate monitoring of the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA), the ongoing La Niña is likely to persist until March 2021.
“The imminent threat of natural calamities every year highlights the need for long-term solutions such as infrastructure investments that would improve flood control, water management and irrigation systems, reforestation, climate-resilient production and processing facilities, among others,” Chua said.