December inflation soars to 8.1%, driven by higher food prices

INFLATION in December quickened further mainly due to the higher prices of select food items including onions and other vegetables, the government reported on Thursday.

The consumer price index rose 8.1 percent, faster than the eight percent the previous month and the highest since November 2008, the Philippine Statistics Authority said.

Data showed that inflation of food and non-alcoholic beverages index in December was at 10.2 percent from 10 percent in November, while the total food inflation at the national level rose to 10.6 percent from 10.3 percent the previous month.

Faster food inflation is driven by higher prices of vegetables (32.4 percent) and sugar (38.8 percent) amid higher input costs and lower production, as weather disturbances in the previous months disrupted farmers’ planting calendar. In addition, the higher demand due to the holiday season pushed inflation up for restaurant and accommodation services at seven percent.

“As part of the eight-point Socioeconomic Agenda of the Marcos Administration and as laid out in the Philippine Development Plan (PDP) 2023-2028, the government will continue to prioritize addressing the impact of inflation as it remains to be a challenge not only in the country, but throughout the globe,” National Economic and Development Authority (Neda) Secretary Arsenio Balisacan said in a statement.

He likewise noted the timely decision of President Ferdinand Marcos Jr. to extend the validity of the reduced import rate duties on various products such as pork, rice, corn and coal until December 2023.

“Executive Order No. 10, s 2022 will continue to provide diversified sources of food and agricultural inputs in the short term. The operational intervention, however, is to ensure food security by boosting food production, improving farm-to-market connectivity, and investing in disaster resilience, climate adaptation measures, and coordination mechanisms,” added Balisacan.

Enhancing the value chain through digital technology and development of climate-smart farm products will also play an essential role in securing food supply and prices.

“As laid out in PDP Chapter 3, the government will strengthen the establishment of strategically located facilities such as interconnected transport systems, wholesale food terminals and trading centers, and other production and postharvest facilities. Also critical will be complementary private sector investments such as warehouses, cold chains, cold storage facilities, processing facilities, and digital marketing channels, among others,” added Balisacan.

The Neda chief also highlighted the need to streamline disaster response and rehabilitation mechanisms to cope with the frequent weather disturbances experienced by the country.

Under this strategy, the government will mainstream the use of technology to predict supply chain disruptions; adopt site-specific, timely, and simplified climate outlook and weather forecasts; improve biosecurity measures; and accelerate the development of vaccines to control livestock and poultry diseases.

“There is an urgent need to modernize the country’s agriculture and agribusiness to increase productivity and ensure that there is adequate, affordable, and nutritious food on the table of every Filipino,” Balisacan said.