HEADLINE inflation further eased to 3.9 percent in December last year, the lowest recorded since the 3 percent seen in February 2022.
In a briefing on Friday, Jan. 5, National Statistician Dennis Mapa said the headline inflation last month was lower than the 4.1 percent in November 2023, and the 8.1 percent seen in December 2022.
It is also within the 3.6 to 4.4 percent forecast range of the Bangko Sentral ng Pilipinas (BSP) for the month.
Core inflation, which excludes volatile oil and food items, also decelerated to 4.4 percent from 4.7 percent in November.
Mapa said the downtrend was primarily due to the lower year-on-year growth in the index of housing, water, electricity, gas and other fuels at 1.5 percent in December 2023 from 2.5 percent the previous month.
This was followed by food and non-alcoholic beverages with 5.4 percent inflation in December from 5.7 percent in November 2023.
Food inflation alone eased to 5.5 percent from 5.8 percent the previous month.
Rice inflation, however, rose to 19.6 percent in December from 15.8 percent in November 2023.
For the full year 2023, headline inflation settled at 6 percent.
Following the trend at the national level, inflation in the National Capital Region (NCR) also decelerated to 3.5 percent in December from 4.2 percent in November.
For areas outside the NCR, inflation also eased to 4 percent from 4.1 percent the previous month.
Inflation for the bottom 30 percent households, however, slightly picked up to 5 percent from 4.9 percent due to the higher inflation for food and non-alcoholic beverages.
Risks to Inflation Outlook
In a statement, the BSP said the latest inflation outturn is consistent with its projections that inflation will likely moderate in the near term due to easing supply-side price pressures and negative base effects.
It noted, however, that the risks to the inflation outlook continue to lean significantly toward the upside.
“Key upside risks are associated with potential pressures from higher transport charges, increased electricity rates, higher oil prices, and higher food prices due to strong El Niño conditions,” the BSP said.
It added that the impact of a relatively weak global recovery as well as government measures to mitigate the effects of El Niño could reduce the central forecast.
“Looking ahead, the Monetary Board deems it necessary to keep monetary policy settings sufficiently tight until a sustained downtrend in inflation becomes evident,” the central bank said.
The BSP said it will continue to monitor inflation expectations and second-round effects and take appropriate action as needed to bring inflation back to the target in line with keeping with its price stability mandate. (PNA)/PN
