DOF expects slower inflation this year
The Department of Finance (DOF) expects inflation to gradually trend downward in the coming months as the government implements programs aimed at mitigating food supply concerns.
Finance Undersecretary and Chief Economist, Gil S. Beltran, said the further deceleration of inflation to 3.65 percent in December can be attributed to the Department of Agriculture’s (DA) food supply mitigating measures.
Beltran said the DA imposed “unhampered” programs to address the food supply concerns.
In the final month of 2021, inflation continued its downward trend from 4.24 percent in November. The December headline figure was the lowest for the year.
“The DA needs to streamline further its importation procedures, particularly on labeling and requirements that reduced MAV Plus utilization to 65 percent,” Beltran said in a DOF Economic Bulletin.
“The transportation and distribution of food items must proceed unhampered,” he added.
The decline in the inflation rate last December could be traced to both food and non-food groups, Beltran said.
Food inflation fell to 3.19 percent while non-food inflation eased to 3.65 percent after peaking during the year to 4.1 percent in November.
In particular, rice price inflation moderated from 0.99 percent in November to 0.90 percent in December. Price of fish from the peak of 12.39 percent in August has dropped to 6.97 percent previously while vegetables further decelerated from -1.85 percent to -9.97 percent in December.
In the non-food sector, transportation price inflation eased from 8.84 percent in November to 6.13 percent in December following hefty roll back in the pump prices of petroleum products.
Dubai crude oil prices averaged $72.8 per barrel, down from $79.9 per barrel in November.
Month-on-month, the general price level increased by 0.31 percent in December at a slower pace than the 0.69 percent rate in November, on account of both food and non-food sectors.
Food price level increased by 0.72 percent in December, decelerating from its jump by 1.1 percent in the previous month, while non-food price level remained flat.
Despite the declining month-on-month trend, the annualized rate remains high especially for food prices—computed at nearly nine percent—due to weather issues, and continuing Asian swine fever (ASF).
For the whole year of 2021, inflation rate averaged 4.39 percent, overshooting the Bangko Sentral ng Pilipinas target range of two-four percent.