MORE expensive food items increased inflation in November to its highest in 19 months, according to the Philippine Statistics Authority (PSA).
On Friday, PSA said inflation averaged 3.3 percent, the highest since March 2019 when inflation was at the same rate. This placed the average inflation for the year at 2.6 percent.
The National Economic and Development Authority (Neda) said the restrictions on public transport as a result of Covid-19, persistence of African swine fever, and damage and losses in high-value crops following the onslaught of several typhoons and flooding in November 2020 were among the factors that fueled inflation.
“To help ease the burden on public transport operators and drivers who have been adversely affected by the lockdowns, the Department of Transportation[DOTr] may also consider waiving some regulatory fees, as well as expanding the efficient service contracting mechanism to incentivize continued operations and encourage even more public-utility vehicles [PUV] to resume operations, given the reduced load capacity in adherence to minimum health standards,” Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said.
Chua noted the need to revisit public transport system guidelines and for LGUs and the Land Transportation Franchising and Regulatory Board (LTFRB) to monitor and review prevailing and unwarranted fare increases in public transport “as we gradually reopen the economy and allow more public transport, while still reinforcing the ‘seven commandments’ of safe public transportation.”
The 7 commandments are wearing of face mask and face shield; no talking while in transit; no eating in public transport facilities; sufficient ventilation; frequent disinfection; preventing symptomatic passengers from using mass transport; and maintaining physical distancing.
Food factor
National Statistician Claire Dennis S. Mapa said food accounted for 51.7 percent of the inflation in November 2020. He said the data collection was able to gather the information right after the recent typhoons which highlighted supply problems that led to higher prices.
“Ang datos natin ay nagpakita nga na ang sources ng pagtaas ng inflation ay talagang nasa food basket natin. [Our data showed the sources of inflation are really in our food basket]. [These are] vegetables, meat, and fish so these are really influenced by the supply and you have typhoons in November so it affected these prices,” Mapa said in the press briefing on Friday.
“[Our survey on] consumer price index is done twice a month. Our first survey is in the first week of the month and the second is done in the middle. So these quickly captures the impact of the typhoons on the changing prices in the commodity groups,” he added, partly in Filipino.
The prices of vegetables such as onion and tomatoes surged to 14.6 percent in November from -0.5 percent in October 2020.
Data also showed that meat, particularly pork at 8.2 percent from 4.7 percent; and fish such as galunggong or round scad, 5.3 percent from 3.7 percent.
Prices of alcoholic beverage and tobacco, particularly cigarettes, also contributed to higher inflation at 13.2 percent in November 2020 from 11.8 percent in October 2020.
Mapa explained that while the Department of Agriculture imposed a Suggested Retail Price (SRP) for these commodities, the supply disruptions caused by the typhoons affected food prices.
He added that in the case of meat, the Philippines experienced an outbreak of the African swine fever (ASF) which affected the steady supply of pork in the country.
Logistics, transport
Moreover, Mapa said, logistics and transportation costs were high in areas like Metro Manila, thereby increasing food prices in these areas.
Inflation in Metro Manila was at 3.5 percent, mainly due to higher Food and Non-alcoholic Beverage prices which increased 6.2 percent in November 2020 from 2.6 percent in October 2020.
Rice was one of the food items that saw a rapid price increase in Metro Manila at 3.9 percent in November 2020 from 1.9 percent in October 2020.
This is in contrast to rice prices in Areas Outside of the National Capital Region where the increase in rice prices was -0.6 percent in November from -0.8 percent in October.
Mapa explained that rice prices in Metro Manila increased due to the low supply caused by logistics issues, as well as the increase in the rice varieties available in the Philippine capital.
He said there was a higher increase in the price of regular and well-milled rice, which averaged at P32 to P38 per kilo and around P40 per kilo, respectively. Special rice varieties at P50 and above, however, did not see higher inflation.
“We’ve seen this happening in the past two to three months, when the trend in rice in the National Capital Region began to change. Our field offices in the National Capital Region gave us two reasons because I asked them to verify in the outlets,” Mapa said.
“First, this November supply was down, yung delivery at yung mga variety ay iba, ibig sabihin dumadami kasi yung variety natin dito sa regular milled at sa well-milled rice,” he added.
However, in terms of region, Bicol—which was significantly damaged by typhoons Quinta, Rolly, and Ulysses—recorded the highest inflation at 5.5 percent.
Mapa said this was largely due to the cost of transportation which recorded an inflation of 37.6 percent in November 2020. There was a 125.6-percent increase in tricycle fares while jeepney fares saw a 33.5-percent inflation.
Inflation for poorest
Inflation for the poorest income households continued increase to 3.6 percent in November 2020.
This is the highest inflation recorded for the bottom 30 percent income households since February 2019 when inflation was at 4.3 percent.
However, the inflation experienced by the poorest Filipinos living in Metro Manila was at 6.2 percent in November 2020. This was the highest since December 2018.
The highest increase in inflation in NCR for the poorest 30 percent of the population was in Transportation, which was at 23.2 percent. Inflation of transport breached the 20-percent level in July and maintained an above 20-percent inflation until November 2020.
This was followed by Alcoholic Beverages and Tobacco at 10.1 percent, and food and non-alcoholic beverages at 9.1 percent.
The PSA data showed that the inflation of food and non-alcoholic beverages of 9.1 percent is the highest since October 2018.
Image credits: Nonie Reyes