Inflation in the Philippines went up even higher at 8.7 percent in January 2023, faster than 8.1 percent in December 2022 that was thought to have been the peak, according to the Philippine Statistics Authority.
National Statistician Dennis Mapa said the January headline print was the fastest since 9.1 percent in November 2008. It was also almost thrice as fast as the 3 percent recorded in January 2022
The latest overall readout was mainly driven by faster increases in housing rentals, electricity and water rates as well as in the prices of vegetable, milk and eggs, and fruits and nuts.
Also, core inflation — which excludes selected food and energy items in the headline inflation — rose to 7.4 percent in January from 6.9 percent in December. A year earlier, in January 2022, core inflation was lower at 1.8 percent.
The January inflation rate was way above the 7.7 percent forecast in a Reuters’ poll.
This keeps the pressure on the Philippine central bank to further tighten monetary policy.
The Bangko Sentral ng Pilipinas, which had forecast the January Consumer Price Index to be between 7.5 percent-8.3 percent, said on Saturday it will focus on inflation rather than the Federal Reserve’s 25-basis point hike when it meets on Feb. 16 to review key interest rates
BSP Governor Felipe Medalla has previously signaled further interest rates hikes at the central bank’s first two policy meetings this year to bring inflation back within a target range of 2 percent to 4 percent.
Elevated inflation, plus the need to maintain interest rate differentials between the U.S. and the Philippines, have forced the central bank to embark on aggressive tightening, with the benchmark rate rising by a total of 350 bps last year.
Economic Planning Secretary Arsenio Balisacan said after the data was released that the impact of the central bank’s series of rate hikes in 2022 should be felt this year and result in a moderation in inflation starting in 2023.