Inflation in the Philippines has shown a significant slowdown for two consecutive months, with November’s figures marking a notable decline. The Philippine Statistics Authority reported that prices of key food items fell, leading to a decrease in inflation rates. November’s inflation rate stood at 4.1 percent, down from October’s 4.9 percent, and significantly lower than the 8.0 percent recorded the previous year.
The November inflation rate falls within the 4.0 to 4.8 percent range estimated by the Bangko Sentral ng Pilipinas (BSP) for the month. It is also lower than the 4.4-percent median predicted by economists in a Manila Times poll.
The Philippine Statistics Authority explained that the decline in inflation was primarily driven by the lower year-on-year growth rate of heavily-weighted food and non-alcoholic beverages. In November 2023, the growth rate for this category was at 5.7 percent, compared to 7.0 percent in October 2023.
Food and alcoholic beverages accounted for a little over half of the overall inflation, with a 52.6 percent share or 2.2 percentage points. The decline in food inflation, particularly in the prices of vegetables, tubers, plantains, cooking bananas, and pulses, contributed to the overall decrease. In October, food inflation was at 7.1 percent, but it fell to 5.8 percent in November.
Restaurants and accommodation services also played a role in the overall drop in November’s inflation rate. This category, which had a 13.2 percent share or 0.5 percentage point, saw inflation ease to 5.6 percent from 6.3 percent in the previous month.
Furthermore, core inflation, which excludes volatile food and energy items, continued to decelerate in November. It stood at 4.7 percent, down from the 5.3 percent recorded in the previous month and 6.5 percent a year earlier.
Despite the recent slowdown, the year-to-date overall inflation rate in the Philippines reached 6.2 percent, still exceeding the BSP’s target range of 2.0 to 4.0 percent. Core inflation, on the other hand, averaged 6.8 percent.
The decline in inflation rates in the Philippines, particularly in the food and non-alcoholic beverages category, is a positive development for consumers. Lower prices for essential food items, such as vegetables and cooking bananas, contribute to a decrease in overall inflation, providing relief for households.
However, it is important to note that the overall inflation rate remains above the BSP’s target range. This suggests that there are still underlying factors contributing to inflationary pressures in the economy. Policymakers will need to closely monitor these factors and implement appropriate measures to ensure price stability and sustainable economic growth.
As the year progresses, it will be crucial to observe if the downward trend in inflation continues and if the BSP’s target range can be achieved. Consumers and businesses alike will benefit from a stable and predictable inflation environment, fostering confidence and supporting economic activities.
Overall, the recent slowdown in inflation rates in the Philippines is a positive development, driven by lower food prices. However, sustained efforts are needed to address the underlying factors contributing to inflation and ensure long-term price stability.
Source: The Manila Times
