Inflation in Philippines Reaches Highest Level Since 2008
BSP expects inflation to slowly decrease in the coming months, but warns it will take action to bring inflation back to target levels.
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- Inflation in the Philippines rose to 8.0% in November, the highest level since 2008.
- The increase was within the BSP’s forecast range, but above the government’s announced target range for 2022.
- Higher inflation was largely due to rising food prices from recent typhoons.
Headline Inflation in the Philippines went up to 8.0 percent in November, the most it has been since 2008. This was in line with what the BSP expected (7.4-8.2 percent), but higher than the government’s target for 2022 (2.0-4.0 percent).
Headline inflation is a measure of the overall rate of inflation in an economy. It is calculated by taking the average of changes in prices for a basket of goods and services, such as food, clothing, housing, and transportation. Headline inflation is also known as consumer price inflation or overall inflation.
Core inflation, which excludes volatile food and energy items, also increased to 6.5 percent in November from 5.9 percent in the previous month. The higher inflation was largely attributed to the rise in food prices* due to strong typhoons over recent months. In particular, rice, fruits, sugar, and vegetables such as eggplants and red onions saw faster price increases.
* Inflation is the general increase in prices over time, while a rise in food prices is a specific example of inflation. Rise in food prices can contribute to overall inflation, but it is not the only factor that can cause inflation.
The BSP said limited fish supply due to the start of the annual closed fishing season, as well as severe tropical storm Paeng, pushed fish prices higher, contributing to the rise in non-food inflation. Inflation for transport and housing, water, electricity, gas, and other fuels remained high.
The BSP expects inflation to slowly go down in the next few months as the effects of bad weather and changes to transportation prices start to disappear. However, the BSP also said it will take necessary action to bring inflation back to the target-consistent path over the medium term.
The next policy meeting of the Monetary Board will be on December 15.
This article is published on BitPinas: Inflation in Philippines Reaches Highest Level Since 2008
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