2019 inflation settles at 3-year low of 2.5%

MANILA, Philippines — Inflation rose to a higher-than-expected 2.5 percent year-on-year in December amid seasonal price increases during the Christmas holidays and typhoons that jacked up food prices, the government reported Tuesday.

For the entire 2019, headline inflation averaged 2.5 percent, the lowest in three years or since the 1.3 percent posted in 2016.

The rate of increase in prices of basic commodities in 2017 was a higher 2.9 percent, while it hit a 10-year high of 5.2 percent in 2018 due to skyrocketing global oil prices, new or higher excise taxes slapped on consumption under the Tax Reform for Acceleration and Inclusion (TRAIN) Act, and domestic food supply bottlenecks, especially of rice.

During the month of December alone, higher transport costs and prices of food, non-alcoholic drinks, alcoholic beverages, and cigarettes pushed inflation up, Deputy National Statistician Rosalinda Bautista said.

Bautista said seasonal factors reflecting higher demand during the Christmas season hiked prices, especially of food and non-alcoholic beverages as well as recreation and cultural activities.

The onslaught of typhoons Tisoy and Ursula last month also made vegetables, fish and fruits more expensive, Bautista added.

Rice prices nonetheless declined 6.8 percent year-on-year last December, continuing the downward trend during the past eight months, thanks to the implementation of the Rice Tariffication Law that liberalized importation, Philippine Statistics Authority (PSA) data showed.

Among the country’s regions, Bicol posted the highest inflation rate of 3.3 percent year-on-year in December mainly due to the impact of typhoon Tisoy on food prices, Bautista said.

Edited by MUF