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PASIG CITY, February 6 – The Philippine Statistics Authority reported today that the country’s headline inflation rate accelerated to 4.2 percent in January 2021, from 3.5 percent in the previous month. This is the fastest inflation rate in two years since the 4.4 percent inflation recorded in January 2019. Despite the higher inflation rate in January, the National Economic and Development Authority (NEDA) said the Inflation target for this year remains unchanged at 2 to 4 percent.
The faster inflation in January 2021 was mainly driven by rising price indices for food, particularly meat and vegetables. Food inflation accelerated to 6.6 percent, while non-food inflation was unchanged from the previous month at 2.3 percent. Meanwhile, faster price adjustments were also recorded in restaurants, miscellaneous goods and services, and transportation.
Rising food inflation can be attributed to outbreaks of African swine fever (ASF), additional logistics and transportation costs to obtain pork to increase supplies across the country, fishing season closed in various regions and damage to the countryside from typhoons and floods. last year.
“Our priority at this time is to ensure that the food supply is adequate so that households affected by COVID-19 and quarantines are not doubly affected by the increase in food prices,” said the Acting Secretary of Socioeconomic Planning. Karl Kendrick T. Chua.
Meanwhile, allowing more import of key agricultural products, while adhering to strict security protocols to prevent the entry of contaminated products, will help increase supply and control inflation.
The Committee on Tariffs and Related Matters has endorsed the proposed increase in the minimum access volume (VAM) for pork and the temporary decrease in the most-favored-nation (MFN) tariff rates for pork and rice, subject to the process and proper investigation by the Tariff Commission. All of these can increase the food supply and stabilize food prices.
The Department of Agriculture is implementing a four-pronged approach to increase pig supply through increased pig production in identified ASF-free areas. In particular, NEDA supports the Department of Agriculture’s proposal to increase the MAV allocation for pork imports and to implement ‘special lanes for pigs’ or food roads in coordination with the Department of the Interior and the Local Government. These measures will help boost the national supply and ensure the unimpeded delivery of agricultural products throughout the country.
The updated 2017-2022 Philippine Development Plan released yesterday also details strategies to increase connectivity through infrastructure development and opening up the logistics sector to ensure access to commodities.
However, headline inflation remains manageable as we continue to reap the benefits of the Rice Pricing Law.
“We passed the Rice Tarifation Law to address the rice shortage and related price increases in 2018. As a result, rice prices decreased by around 10 pesos per kilo from their peak. In January, rice inflation approached zero at just 0.1 percent. As before, the government remains proactive in tackling inflation spikes, as this affects the poor the hardest, ”said the head of NEDA. (NEDA)
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