January 05, 2021
Despite upside risks, the Philippines’ full-year inflation rate for 2020 settled below the midpoint of the Bangko Sentral ng Pilipinas’ (BSP) target range for the year, the National Economic and Development Authority said.
The Philippine Statistics Authority reported today that in December 2020, the country’s headline inflation rate accelerated to 3.5 percent, coming from 3.3 percent in November 2020 and 2.5 percent in December 2019.
Despite this, the country’s average inflation rate for 2020 settled at 2.6 percent, only slightly higher than the 2.5 percent in 2019 and well within the 2 to 4 percent inflation target range of the government for the year.
“Even with the low inflation environment, there is still a need to improve supply chain efficiency to ensure that prices of essential goods and services remain stable,” Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said.
The faster inflation in December 2020 was mainly driven by the increase in the price indices of food & non-alcoholic beverages, transport, and restaurant & miscellaneous goods & services. Among the sub-groups, prices of vegetables and meat significantly increased from the previous month.
The faster inflation in agricultural products could be traced to lower production following the damage caused by previous typhoons. Meanwhile, meat inflation inched up for the third consecutive month owing to the decline in domestic swine production due to the African Swine Fever (ASF).
Chua emphasized the need to establish processing facilities that will prevent wastage and spoilage of farm harvests, such as the Benguet Agri-Pinoy Trading Center in the Cordillera region where a large part of the country’s supply of vegetables is sourced.
He also underscored the need to set up additional cold storage facilities, warehouses, and post-harvest centers that will further improve supply management in the agriculture sector, especially in times of natural disasters or when there are surplus in harvest.
Furthermore, online platforms such as the various Kadiwa ni Ani at Kita modalities as well as the recently launched Deliver-E – a new digital platform that directly links buyers to producers launched by the Department of Agriculture and the Department of Trade and Industry – will also help address issues on logistics.
Aside from the ongoing pandemic, the country has been facing adverse weather conditions in recent months. Based on the latest climate monitoring of the Philippine Atmospheric, Geophysical and Astronomical Services Administration or PAGASA, the ongoing La Niña is likely to persist until March 2021.
“The imminent threat of natural calamities every year highlights the need for long-term solutions such as infrastructure investments that would improve flood control, water management and irrigation systems, reforestation, climate-resilient production and processing facilities, among others,” Chua said.
Chua also encouraged the continued use of climate-resilient varieties of seeds and technologies.