The sustained rise in the cost of goods and services accelerated further in December to 3.5 percent, the Philippine Statistics Authority (PSA) announced on Tuesday.
Still, the latest inflation print proved to be the highest since it stood 3.8 percent in February 2019, reflecting a 22-month high.
National Statistician Claire Dennis Mapa traced the higher inflation to the spike in the prices of food and non-alcoholic beverages, particularly on vegetables.
The PSA chief likewise attributed the faster increase of prices to the higher cost of transport services, especially on tricycle fares which showed a 47.2 percent rise in December from just 45.9 percent month-ago.
“Inflation in the National Capital Region (NCR) was recorded at 3.2 percent for the month of December 2020. This is lower than the 3.5 percent inflation in November 2020,” Mapa said.
“On the other hand, areas outside NCR recorded a 3.7 percent inflation in December. This is higher than the 3.3 percent inflation in November,” he added.
For the bottom 30 percent income households, inflation in December also grew by 4.3 percent, notably higher than its year-ago figure of just 1.9 percent.
Still within target
While inflation in December proved to be its peak for 2020, the National Economic and Development Authority (NEDA) considered such to remain manageable as the figure still sits within the government’s 2 to 4 percent target range.
Acting NEDA Secretary Karl Kendrick Chua said that while inflation remains low, the government must continue to implement programs that will keep market prices stable.
“Even with the low inflation environment, there is still a need to improve supply chain efficiency to ensure that prices of essential goods and services remain stable,” Chua said.
“The imminent threat of natural calamities every year highlights the need for long-term solutions such as infrastructure investment that would improve flood control, water management and irrigation systems, reforestation, climate-resilient production and processing facilities, among others,” he added.
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno commented that the latest inflation outcome remains within their forecast, settling within their projected range of 2.9 to 3.7 percent.
“The BSP continues to expect inflation to settle within the target range over the policy horizon,” Diokno said.
According to him, such rise in inflation could be considered “transitory” as it reflects the short-term impact of recent weather disturbances.
“The overall balance of risks to future inflation continues to lean toward the downside owing mainly to the continued uncertainty caused by the pandemic on domestic and global economic activity,” the BSP chief said.
“The BSP stands ready to deploy its full arsenal of instruments as needed in fulfillment of its mandate to maintain price and financial stability conducive to sustainable economic growth,” he concluded.
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