THE Philippines’ headline inflation rate reached an all-time high of 8.1 percent in December 2022, the Philippine Statistics Authority reported Thursday.
- This is the country’s highest inflation rate reported for 2022 and the highest since November 2008.
- With the current inflation rate, the country’s average inflation for 2022 stood at 5.8 percent. Compared to the same period last year, the country’s headline inflation rate was at 3.1 percent.
Why does inflation matter?
Inflation is the rate in the rise of prices of basic goods and services. If the inflation is high, it means the money that you now have can only buy less compared to the previous month or year.
For example, if you have P1,000 in December 2022, the real worth of that money is only P919 compared to November 2022.
Inflation may also affect your personal investments and the interest rates of your loans.
What’s driving December inflation?
National Statistician Dennis Mapa said in a press briefing that food was the primary contributor to the uptick in the inflation rate. The national inflation rate for food reached 10.6 percent in December 2022; this marked a further increase over the previous month’s rate of 10.3 percent.
- The leading causes of the rise in food inflation in December 2022 were the higher year-over-year growth rates in the indices of vegetables, tubers, plantains, cooking bananas, and legumes (32.4 percent), rice (3.4 percent), and fruits and nuts (7.6 percent), said the PSA report.
- Mapa noted that the rise of onion prices had a “substantial” contribution to the increase in the overall inflation rate of 0.3 percent. He said that the inflation rate for onions is now equal to rice.
What caused the 5. inflation?
The PSA also said annual increases were also higher in the indices of the following primary commodity groups:
- Flour, bread and other bakery products, pasta products, and other cereals, 10.9 percent
- Milk, other dairy products, and eggs, 9.9 percent
- Sugar, confectionery, and desserts, 38.8 percent
- Ready-made food and other food products not elsewhere classified (n.e.c.), 9.4 percent.
Food, drinks, hotels, restaurants bring inflation up
The year-over-year growth rate in the food and non-alcoholic drinks index accelerated to 10.2 percent in December 2022, up from 10.0 percent in November 2021. This was the primary factor that led to the higher level of inflation in December 2022 as compared to November 2021, the PSA said.
The next industry to experience an increase in inflation was the hospitality industry, which had rates of 7.0 percent, up from 6.5 percent in November 2022. This included restaurants and accommodation services.
Mapa said housing, water, electricity, gas, and other fuels came in third with an inflation rate of 7.0 percent in December 2022, up from 6.9 percent in the previous month.
Regional inflation rate
PSA said some regions “exhibited higher inflation rates” in December, with Western Visayas reporting the highest inflation rate with 10.5 percent, up from 9.6 percent in November, while the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) remained as the region with the lowest inflation at 6.3 percent, according to the statistics department.
In November, the National Economic and Development Authority said to curb the lingering effects of rising prices of commodities, they would provide short-term, immediate-term, and long-term solutions in the forms of financial aid programs for agriculture, fishery, and transportation sectors to increase productivity rate.
NEDA upbeat on exceeding growth rate target by year-end
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