Inflation hits 2.5% in November as storms hit food supply

The Philippines’ overall inflation accelerated to 2.5% in November 2024 as prices of basic food commodities spiked following a series of typhoons, the Philippine Statistics Authority (PSA) reported on December 5.

The latest figure is faster than October’s inflation print of 2.3% but remains below the 4.1% recorded in November of the previous year.

This brought the year-to-date average inflation to 3.2%, slightly exceeding the Bangko Sentral ng Pilipinas’ (BSP) 3.1% full-year forecast but still within the government’s ceiling of 2.0% to 4.0%.

In a press briefing, PSA Undersecretary Claire Dennis Mapa attributed the inflation uptick in November to the faster price increases of vegetables, fish and meat due to unfavorable weather conditions, higher electricity rates and petroleum prices, and the depreciation of the Philippine peso.

Mapa also cited higher annual increments in the indices of alcoholic beverages and tobacco at 3.1% (up from 3.0%); furnishings, household equipment and routine household maintenance at 2.7% (from 2.4%); and personal care and miscellaneous goods, services at 2.9 % (from 2.8%).

Meanwhile, food inflation rose to 3.5% from 3.0% in October driven by a year-on-year increase in the index of vegetables, tubers, plantains, cooking bananas, and pulses at 5.9%.

However, Mapa noted a slower increase in the inflation of rice was observed last month.

“The trend from January to November, it’s been declining. There are factors here, like base effects, but the retail prices per kilogram for regular milled, well-milled and special rice are also declining,” Mapa said.

PSA data showed that the average price of regular milled rice dropped to P49.24 per kilo in November from P50.22 in October; well-milled rice fell to P54.64 from P55.22; and special rice declined to P63.72 from P63.97.

“Our expectation for December is for rice inflation to slow further, which is good news for our households. The inflation for the bottom 30% also slowed because the weight of rice is significant for them,” he added.

The decline follows an executive order implemented in July that reduced rice import tariffs to 15.0%.

Following the national trend, inflation in Metro Manila rose from 1.4% in October to 2.2% in November on the back of faster increments in the indices of food and nonalcoholic beverages at 4.3% (up from 2.2%) and vegetables, tubers, cooking bananas, and others at 14.6% (from -10.6%).

In contrast, inflation for areas outside the metro stood at an unchanged rate of 2.6% with Cagayan Valley recording the highest rate at 3.4% (up from 3.1%), while Soccsksargen, Caraga, and the Bangsamoro Autonomous Region in Muslim Mindanao all posted the lowest rate with 1.7%.

Upside risks

In a separate statement, the BSP said the latest inflation outturn aligns with its assessment that inflation will continue to trend closer to the low end of the target range in the near term.

However, it noted that the balance of risks to the outlook for 2025 and 2026 has shifted toward the upside.

“Upside risks to the inflation outlook could emanate from the potential adjustments in electricity rates and higher minimum wages in areas outside Metro Manila, while downside factors continue to be linked to the impact of lower import tariffs on rice,” the central bank said.

The BSP had previously forecasted that the November inflation would settle within the range of 2.2% to 3.0%.

“Going forward, the Monetary Board will continue to take a measured approach in ensuring price stability conducive to balanced and sustainable growth of the economy and employment,” it added.