THE Philippine Statistics Authority reported Tuesday, Jan. 5, 2021 that the country’s headline inflation rate in December 2020 accelerated further to 3.5 percent, coming from 3.3 percent in November 2020.
This is the highest inflation recorded since March 2019, the PSA said. Inflation in December 2019 stood at 2.5 percent.
The faster inflation in December 2020 was mainly driven by the increase in the price indices of food and non-alcoholic beverages, transport, and restaurant and miscellaneous goods and services. Among the sub-groups, prices of vegetables and meat significantly increased from the previous month.
The faster inflation in agricultural products could be traced to lower production following the damage caused by previous typhoons. Meanwhile, meat inflation inched up for the third consecutive month owing to the decline in domestic swine production due to the African swine fever.
But despite the upside risks, the Philippines’ full-year inflation rate for 2020 settled below the midpoint of the Bangko Sentral ng Pilipinas’ target range for the year, according to the National Economic and Development Authority.
The country’s average inflation rate for 2020 settled at 2.6 percent, only slightly higher than the 2.5 percent in 2019 and well within the two to four percent inflation target range of the government for the year.
“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,” Acting Socioeconomic Planning Secretary Karl Kendrick Chua said in a statement.
Chua emphasized the need to establish processing facilities that will prevent wastage and spoilage of farm harvests, such as the Benguet Agri-Pinoy Trading Center in the Cordillera region where a large part of the country’s supply of vegetables is sourced.
He also underscored the need to set up additional cold storage facilities, warehouses and post-harvest centers that will further improve supply management in the agriculture sector, especially in times of natural disasters or when there is a surplus in harvest.
Aside from the ongoing pandemic, the country has been facing adverse weather conditions in recent months. Based on the latest climate monitoring of the Philippine Atmospheric, Geophysical and Astronomical Services Administration, the ongoing La Niña is likely to persist until March 2021.
“The imminent threat of natural calamities every year highlights the need for long-term solutions such as infrastructure investments that would improve flood control, water management and irrigation systems, reforestation, climate-resilient production and processing facilities, among others,” Chua said.
Chua also encouraged the continued use of climate-resilient varieties of seeds and technologies. (PR)