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Philippine inflation eases to three% in January

Inflation eased to three% in January, from 3.2% in December. — Picture by Cathy Rose A. Garcia

By Ana Olivia A. Tirona, Researcher 

Philippine annual inflation eased for the fifth straight month to its lowest degree in 15 months in January, as the rise in housing and utilities prices slowed. 

Underneath rebased 2018 costs, preliminary knowledge from the Philippine Statistics Authority (PSA) confirmed headline inflation slowed to three% 12 months on 12 months in January. This was slower in contrast with 3.2% in December and the three.7% print in January final 12 months. 

It was the fifth consecutive month that headline inflation decelerated for the reason that 4.4% peak seen in August final 12 months. 

January’s print matched the tempo logged in November 2020 and the slowest in 15 months or for the reason that 2.3% inflation price recorded in October 2020. 

The headline determine additionally matched the three% median estimate in a BusinessWorld ballot carried out per week in the past. 

Furthermore, the January print was under the three.4% forecast however nonetheless throughout the 2-4% goal band given by the Bangko Sentral ng Pilipinas (BSP) for this 12 months. 

The PSA attributed the downtrend within the headline print final month to slower inflation for housing, water, electrical energy, fuel and different fuels (4.5% in January from 5.1% in December 2021), in addition to eating places and lodging (3% from 3.2%) and alcoholic drinks and tobacco (5.6% from 6.2%). 

Additionally easing final month had been well being (3.1% from 3.2%); recreation, sport and tradition (1.5% from 1.6%); and training providers (0.6% from 0.7%). 

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In the meantime, meals and non-alcoholic drinks and monetary providers steadied from December (1.6% and 43.3%, respectively). 

Larger annual increments had been additionally famous within the following: transport (7% from 6.6%); furnishing, family gear and routine family upkeep (2.4% from 2.1%); private care, and miscellaneous items and providers (2.2% from 2.1%); clothes and footwear (2% from 1.9%); and data and communication (0.7% from 0.6%). 

ING Financial institution N.V. Manila Senior Economist Nicholas Antonio T. Mapa mentioned that rebasing of costs had a “seismic shift” for shopper worth index (CPI) ranges which is able to proceed all year long. 

“The large issue right here is the meals basket which posted a mere 1.6% achieve in costs vs 2018 ranges. Given the heft of rice and different meals objects and the truth that these commodities had been further dear again then means that we will see meals inflation subdued within the close to time period,” Mr. Mapa mentioned in an e-mail alternate. 

The food-alone index steadied at 1.6% 12 months on 12 months in January from December. Nevertheless, it slowed from 5.9% in January final 12 months. 

The rebasing to 2018 additionally introduced 2021 inflation common to three.9%, throughout the 2-4% central financial institution goal. 

The rebasing ensures that the CPI market basket continues to seize items and providers generally bought by households over time. 

The 2018 rebasing is the twelfth base interval and the eleventh rebasing for CPI, the PSA mentioned. 

Safety Financial institution Corp. Chief Economist Robert Dan J. Roces mentioned the month-on-month inflation price in January was probably borne out of storm Odette (worldwide title: Rai) regardless of the easing year-on-year headline print. 

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“That will likely be an vital metric to trace shifting ahead because it exhibits underlying inflation,” he mentioned in a Viber message. “If the rise in inflation within the months forward turn out to be persistent through month on month, then that ought to fear the authorities.” 

Inflation in January picked as much as 1% on a month-on-month foundation from December. 

Hurricane Odette swept via elements of Visayas and Mindanao in mid-December, leaving harm to agriculture and infrastructure price P13.3 billion and P17.19 billion, respectively. 

Nationwide Statistician Claire Dennis S. Mapa mentioned in a press briefing on Friday inflation print for the underside 30% revenue households will nonetheless have 2012 as the bottom 12 months because the PSA’s rebasing calculations are ongoing. 

January core inflation print was additionally not instantly accessible. 

Inflation as skilled by poor households eased to three.2% in January versus the three.3% in December and 4.9% in January 2021. 


The most recent inflation outturn is in line with the central financial institution’s expectations that inflation will additional ease again to its goal within the coming months, the Bangko Sentral ng Pilipinas (BSP) mentioned in a press release. 

“Given a manageable inflation outlook, the BSP sees ample scope to maintain a affected person hand on its numerous coverage levers, whereas keeping track of potential dangers to inflation and the monetary system,” the central financial institution mentioned. 

In a separate Viber message, BDO Unibank, Inc. Chief Market Strategist Jonathan L. Ravelas now expects the BSP to take care of its accommodative stance amid the downtrend in inflation. 

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Nevertheless, ING Financial institution’s Mr. Mapa warned of doable near-term stress on inflation from tight provide situations. 

“Provide-side bottlenecks stay unresolved as home hog manufacturing continues to be hampered by the unfold of African Swine Fever whereas crude oil costs edge increased,” Mr. Mapa mentioned in a be aware to reporters. 

“Persistent inflation stress coupled with the probably reversal in monetary flows linked to Fed hikes might finally persuade a relatively dovish Diokno to lastly contemplate a coverage adjustment by the top of second quarter,” he added. 

Safety Financial institution’s Mr. Roces mentioned there’s nonetheless room for the BSP to stay accommodative, “however underlying inflation needs to be intently monitored.” 

The Financial Board, the central financial institution’s policymaking physique, is scheduled to satisfy on Feb. 17. 


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