Full-year 2024 inflation rate within target

Metro Manila, Philippines - The government has met its target rate of price increases for 2024 at 3.2% even with the national statistics office recording a faster month-on-month print in December.

The Philippine Statistics Authority (PSA) reported on Tuesday, Jan. 7, that the inflation rate quickened to 2.9% in December, the third straight month of increase.

It said the drivers of higher cost were housing, water, electricity, gas and other fuels, as well as transport.

The 2024 inflation fell within the 2% to 4% target range, with the Bangko Sentral ng Pilipinas earlier predicting a 3.2% average. The full-year rate was also lower than the 6% in 2023.

Lower annual average increase in the indices of food and non-alcoholic beverages, as well as housing, water, electricity, gas and other fuels were the main contributors to the downtrend, the PSA said.

“Despite the risks we encountered throughout the year, our combined efforts to temper inflation have largely been successful,” Socioeconomic Planning Secretary Arsenio Balisacan said in a statement. “We will build upon this momentum as we commit to keep the inflation rate within our target range in 2025.”

Economic managers have set the 2%-4% target until the end of the administration’s term in 2028.

Good outlook in rice

Meanwhile, National Statistician Dennis Mapa said he sees the continuous decline in rice prices.

“In fact, baka meron tayong expectation na maging negative na ang inflation sa rice sa January,” he added.

[Translation: In fact, we expect a possible negative rice inflation in January.]

Food, especially rice, is a major contributor to inflation.

Mapa said the national average price of regular milled rice, for example, was P48.81 per kilogram (kg) in December. This was lower than P50.22 in October and P49.24 in November. It was P49.60 in January 2024

He said the declining trend is also seen in special and premium rice varieties.

President Ferdinand Marcos Jr. ordered a rice tariff cut in July to reduce retail prices. The government said the price would be reduced by P6 to P7 as early as August — something that has yet to happen.

The Department of Agriculture has introduced various programs, including selling aging rice at P29 per kg in Kadiwa markets for vulnerable sectors and P40 per kg of rice available for the general public.

“Nakita niyo nag-iba ang direction nong Disyembre,” Mapa said. “‘Yong inflation rate for the bottom 30% income households from 2.9% noong Nobyembre 2024, ito ay naging to 2.5%.”

[Translation: The direction changed in December. The inflation rate for the bottom 30% income households from 2.9% in November went down to 2.5%.]

“Almost one-fifth of consumption of the bottom 30% income households is either rice or corn,” he said.

Veggies a ‘threat’

When asked about the inflation outlook for January, Mapa said: “There are other items that threaten prices, particularly vegetables.”

For December, tomato was the third main contributor to faster inflation, logging 120.8% from 31.3% in November.

In Metro Manila, Mapa said tomatoes have been sold for P250 up to nearly P300 per kg in the first week of January.

“Ang report sa amin, may pagtaas pa sa presyo ng kamatis. Ang expectation natin patuloy itong tataas nitong January,” he said.

[Translation: We have received reports that there will still be an increase in tomato prices. We expect the price will continue to rise this January.]

Agriculture spokesperson Arnel de Mesa on Monday said the string of storms last year caused extensive damage to tomato production, as well as bell and chili pepper, resulting in “significant supply shortages.”

“Instead of relying on imports during shortages, the government should develop post-harvest processing facilities and cold storage systems for crops like tomatoes,” sectoral group Kilusang Magbubukid ng Pilipinas said. “This would prevent farmers from incurring losses during oversupply or price drops.”

“There is no reason for vegetables to cost as much as pork. The reality is, this crisis stems from the government’s chronic neglect of agricultural development,” the group said.

De Mesa said tomato prices are expected to normalize by February as production resumes.