Inflation soars to 14-year high at 8% in Nov.

Published December 6, 2022, 9:00 AM

by Chino S. Leyco

Consumer prices accelerated further to 8 percent in November, hitting a fresh 14-year high on the back of sustained rise in food costs, the Philippine Statistics Authority (PSA) reported.

Headline inflation surged to 8.0 percent last month from 7.7 percent in October and 3.7 percent in the same month last year, Deputy National Statistician Divina Gracia Del Prado said in a briefing on Tuesday, Dec. 6.

The latest inflation reading was the highest since the 9.1 percent recorded in November 2008, and way above the government’s target range of 2.0 percent to 4.0 percent.

Nevertheless, the rate was within the Bangko Sentral ng Pilipinas’ forecast for the month of 7.4 percent to 8.2 percent.

Most key consumer products registered faster inflation in November, particularly for food and non-alcoholic beverages, which accelerated to 10 percent from 9.4 percent in the previous month.

In particular, prices of vegetables, tubers, plantains, cooking bananas, and pulses jumped 25.8 percent, the highest since January 1999’s 5.6 percent.

Socioeconomic Planning Secretary Arsenio M. Balisacan said substantial uptick was a result of lower production brought about by the onslaught of typhoons and higher cost of inputs.

Similarly, sugar production was still reeling from the damage caused by recent typhoons, Balisacan added.

Increases were also seen in the index of restaurants and accommodation services (6.5 percent), alcoholic beverages and tobacco (10.6 percent), clothing and footwear (3.6 percent), and furnishings, household equipment, and routine household maintenance (4.5 percent).

In addition, price increases were recorded in health (2.8 percent); information and communication (0.7 percent); recreation, sport, and culture (3.3 percent); education services (3.6 percent); and personal care, and miscellaneous goods and services (4.2 percent).

Excluding selected food and energy items, core inflation rose 6.5 percent from 5.9 percent in October and 2.4 percent in November 2021.

Last month’s inflation rate brought the country’s 10-month average to 5.6 percent, still below the Development Budget Coordination Committee’s (DBCC) revised projection of 5.8 percent for 2022.

The DBCC, an inter-agency body tasked to set the government’s macroeconomic assumptions, lowered on Monday its inflation forecast for the year from previous assumption of 4.5 percent to 5.5 percent.

The DBCC attributed the upward revision to persisting high prices of food and transport costs

“The government is continuously implementing targeted subsidies and discounts to allay the impact of the higher prices of essential goods, especially for the vulnerable sectors and low-income earners of our society,” Balisacan said.

The Department of Budget and Management earlier released P5.2 billion to cover the third tranche of the targeted cash transfer program of the Department of Social Welfare and Development.

This covers 9.8 million identified beneficiaries who are most affected by the continuous rise in commodity prices.

The TCT Program grants unconditional cash transfers of P500 per month to the most affected households for six months to mitigate the effects of the increase in the prices of fuel and other non-fuel commodities on vulnerable populations.

“To ease price pressures, we continue to implement measures to boost food production and reduce the cost of bringing farm produce to the market,” Balisacan added.

The Department of Agriculture has also expanded the Kadiwa Program, which aims to connect producers to consumers, allowing a higher profit share for local farmers and more affordable prices for consumer.

Additionally, the government is supporting the agriculture sector by implementing programs to lower costs of inputs, provide financial assistance in the form of fuel discounts to farmers and fisherfolks, develop innovations, and strengthen agricultural value chain.