January inflation flat amid high food costs - PSA

Metro Manila, Philippines - The rate of price increase was unchanged month-on-month in January, even as food items cost more after the holiday season, the Philippine Statistics Authority (PSA) reported Wednesday, Feb. 5.

The PSA said inflation was at 2.9 percent driven by food and non-alcoholic beverages, which contributed half or 1.5 percentage points to the overall month’s inflation.

The number was within the government target of 2 percent to 4 percent.

National Statistician Dennis Mapa said rice inflation was at -2.3 percent, the lowest since June 2020 at -2.8 percent, and the first contraction since December 2021 at -0.1 percent.

On the other hand, the price of vegetables, meat, and fish was on the uptrend. Food inflation rose to 4 percent from 3.5 percent in December.

“Based on the current trend of prices, ang expectation natin [our expectation] based on the computation is that at least hanggang [until] July, we will expect negative inflation for rice,” Mapa said.

“‘Yung ating risks ay dito sa tatlong masabi nating major commodities din, groups dito sa food basket natin, ‘yung meat, ‘yung fish, saka ‘yung vegetables, particular ‘yung kamatis," he said. “Sabi ko nga kanina, malaki ang contribution ng one item na yun, single item, ‘yung tomato, doon sa overall inflation rate which is 0.4%.”

[Translation: Our risks are with the three major commodities in the food basket: meat, fish, and vegetables, particularly tomato. Tomato as a single item had a big contribution to the overall inflation rate which is 0.4% percent.]

The Department of Agriculture declared a food security emergency on rice after the National Price Coordinating Council found an “extraordinary increase” in prices.

It came after a tariff cut on imports in July last year did not significantly reduce market prices, but rice inflation has been on a downward trend in previous months.

“Any action to reduce the price of rice is always beneficial to our Filipino consumers. Kasi malaking ngayong rice weight sa ating CPI basket [The weight of rice in our consumer price index basket is big],” Mapa said of the emergency declaration.

The DA recently said it would look into high pork prices, and has stated it is considering setting a maximum suggested retail price.

The production of tomatoes, meanwhile, had been affected by successive typhoons in the October-December period. The DA earlier said tomato prices were expected to normalize by February as production resumes.

Other main contributors to the January inflation were housing, water, electricity, gas and other fuels, as well as restaurants and accommodation services.

Looking at regional levels, Metro Manila’s inflation slowed to 2.8 percent from 3.1 percent in December, due to lower annual increment in housing, water, electricity, gas, and other fuels.

Inflation in areas outside the National Capital Region was constant at 2.9 percent. Cagayan Valley had the highest print at 5.1 percent, while Soccsksargen was the lowest at 1.1 percent.