January 5, 2023 – Protecting the purchasing power of Filipinos remains on top of the government’s priorities as domestic and global headwinds continue to be a challenge, according to the National Economic and Development Authority (NEDA).
The Philippine Statistics Authority reported today that the country’s headline inflation rate marginally increased to 8.1 percent in December 2022 from 8.0 percent in November 2022. This brings the full-year 2022 average inflation rate to 5.8 percent, which is above the government’s inflation target of 2.0-4.0 percent.
The continued uptrend in the country’s inflation rate in December 2022 was driven by a higher price index for electricity, accounting for 1.0 percentage point (ppt), followed by vegetables with 0.9 ppt. Restaurant services also accelerated and contributed 0.7 ppt, while private and public transport, contributed a total of 1.0 ppt.
Other key agricultural commodities such as meat and fish contributed a total of 0.8 ppt, while processed food commodities such as sugar and bread & other cereals contributed a total of 0.7 ppt to total inflation.
Faster food inflation is driven by higher prices of vegetables (32.4%) and sugar (38.8%) amid higher input costs and lower production, as weather disturbances in the previous months disrupted farmers’ planting calendar. In addition, the higher demand due to the holiday season pushed inflation up for restaurant and accommodation services at 7.0 percent.
“As part of the 8-point Socioeconomic Agenda of the Marcos Administration and as laid out in the Philippine Development Plan (PDP) 2023-2028, the government will continue to prioritize addressing the impact of inflation as it remains to be a challenge not only in the country, but throughout the globe,” said NEDA Secretary Arsenio M. Balisacan. [Download the PDP 2023-2028]
He likewise noted the timely decision of President Ferdinand R. Marcos, Jr. to extend the validity of the reduced import rate duties on various products such as pork, rice, corn, and coal until December 2023.
“Executive Order No. 10, s 2022 will continue to provide diversified sources of food and agricultural inputs in the short term. The operational intervention, however, is to ensure food security by boosting food production, improving farm-to-market connectivity, and investing in disaster resilience, climate adaptation measures, and coordination mechanisms,” added Balisacan.
Enhancing the value chain through digital technology and development of climate-smart farm products will also play an essential role in securing food supply and prices.
“As laid out in PDP Chapter 3, the government will strengthen the establishment of strategically located facilities such as interconnected transport systems, wholesale food terminals and trading centers, and other production and postharvest facilities. Also critical will be complementary private sector investments such as warehouses, cold chains, cold storage facilities, processing facilities, and digital marketing channels, among others,” added Balisacan.
The NEDA chief also highlighted the need to streamline disaster response and rehabilitation mechanisms to cope with the frequent weather disturbances experienced by the country.
Under this strategy, the government will mainstream the use of technology to predict supply chain disruptions; adopt site-specific, timely, and simplified climate outlook and weather forecasts; improve biosecurity measures; and accelerate the development of vaccines to control livestock and poultry diseases.
“There is an urgent need to modernize the country’s agriculture and agribusiness to increase productivity and ensure that there is adequate, affordable, and nutritious food on the table of every Filipino,” Balisacan said.