A price list is displayed near a vegetable stall in Guadalupe Public Market in Makati City on January 13, 2023. Jonathan Cellona, ABS-CBN News

But rice inflation quickens further

MANILA (UPDATE) — Inflation slowed to 2.8 percent in January amid slower increases in the prices of food, except for rice which saw faster price increases, the state statistics bureau said Tuesday.

The Philippine Statistics Authority (PSA) said this was slower than the 3.9 percent clip seen in December, and was within the Bangko Sentral ng Pilipinas' (BSP) forecast range of 2.8 to 3.6 percent.

“Food inflation at the national level eased to 3.3 percent in January 2024 from 5.5 percent in the previous month. In January 2023, food inflation was higher at 11.2 percent,” the PSA said.

Slower increases in the prices of vegetables, fish and other seafood helped keep the headline inflation rate down. The PSA also noted that prices of meat, cooking oil, sugar and corn also declined during the month.

National Statistician Undersecretary Dennis Mapa however also noted that rice inflation had quickened further to 22.6 percent during the month from 19.6 percent in December 2023.

Because of the faster increases in rice prices, inflation for the poorest 30 percent of the population was higher at 3.6 percent.

Core inflation, which strips out volatile food and energy items, meanwhile slowed to 3.8 percent in January from 4.4 percent in December 2023. In contrast, core inflation in January 2023 was higher at 7.4 percent.

RICE PRICES MAY STAY HIGH UNTIL JULY

National Statistician Dennis Mapa the rice inflation figures are the highest seen since the 22.9 percent recorded in March 2009.

He said the cost of regular milled rice averaged at P49.65 per kilo in January, up from P39.60/kilo recorded the year before and P48.48/kilo in December.

Well-milled rice prices, went up to P54.91/kilo, higher than the P43.92/kilo in January 2023 and the P53.82 in December.

Special rice prices also increased to P63.90/kilo, higher than January 2023's P53.76/kilo, and December 2023's P63.8/kilo.

Mapa said rice inflation may remain elevated until July.

"Sa world market, mataas ang presyo ano, so tinitingnan natin ang--in fact, sa discussion with Department of Agriculture, nakikita nila na patuloy ang pagtaas," he said.

"So, sa ngayon nakikita natin na compared to last year, kanina, mga P10-11 yung increase. Mababang inflation rate as I mentioned (noong) January of 2023 hanggang mga July of 2023. So kung patuloy na parang ganito yung presyo, dahil may base nga tayo, ang expectation natin is that we will have rice inflation in the vicinity of 20 percent or higher hanggang mga July," he explained.

Inflation reached a 14-year high of 8.7 percent in January 2023 as prices of onions and sugar soared.

Inflation quickens to 8.7 pct in January as housing, water, power costs rise

Socioeconomic Planning Secretary Arsenio Balisacan said the Inter-Agency Committee on Inflation and Market Outlook will continue to closely monitor rice prices in order to make the right policy recommendations to the president and other officials in the executive department.

Balisacan also said the Department of Agriculture would continuously monitor the situation on the ground to guide the government in addressing food production concerns.

A survey by Pulse Asia in September showed that inflation was the most urgent concern of Filipinos. The Philippines is aiming for an inflation rate of 2 to 4 percent.

Inflation remains Filipinos' top concern: Pulse Asia

TRANSPO COSTS, EL NIÑO COULD AFFECT PRICES

The Bangko Sentral ng Pilipinas (BSP) said the latest inflation print is consistent with their expectations that inflation will moderate in the first quarter, on the back of negative base effects and the easing of supply constraints affecting key commodities.

"However, inflation could temporarily accelerate above the target range from (the second quarter of 2024) due to the impacts of El Niño weather conditions and positive base effects," the BSP said.

BSP said higher transport charges, increased electricity rates, higher oil prices, and higher food prices due to strong El Niño conditions may keep prices up.

Meanwhile, a relatively weak global recovery and government efforts to fight El Niño could ease some price pressures.

The central bank said it will keep monetary policy settings sufficiently tight until a sustained downtrend in inflation becomes evident.

The BSP kept the country’s benchmark target reverse repurchase rate (RRP) steady at 6.5 percent in its December meeting.

BSP again keeps interest rates steady

The BSP's Monetary Board will consider the latest inflation figures — and the country's 5.6 percent economic growth rate in 2023 — in their first 2024 policy meeting on February 15.