MANILA - Philippine inflation hit a 3-month high in October of 2.5 percent. The Philippine Statistics Authority says the main contributors to the acceleration were higher prices of food, certain services, and education.
In terms of food inflation, meat led the way. Pork prices were cited as a major contributor, pushing meat inflation to 4.7 percent, from 2.9 percent in September. National Statistician, Undersecretary Dennis Mapa said the high pork prices correspond to areas hardest hit by the African Swine Fever (ASF) outbreak.
“Ang source talaga ay basically Luzon,” he said.
Mapa added they will be closely monitoring pork inventories. He said “price of meat, particularly pork, spiked due to ASF.”
“Ang inflation sa food group, may turn na sya this month. it depends on the supply, if we continue experiencing the same situation, it is expected we will see an upward trend in the food index.”
Aside from supply issues created by the ASF outbreak, the cost of transporting pork from farms in Visayas and Mindanao to Luzon was also a major factor.
The October meat inflation rate was the highest since July, when high meat prices pushed the overall inflation rate to 2.7 percent. This chart prepared by the ABS-CBN Data Analytics Team shows nearly all major food categories are on an uptrend.
Rice inflation is now very close to turning positive for the first time since early 2019, which would signal the end of rice deflation attributed to the heavy importation allowed by the Rice Tariffication law.
Mapa said they investigated rice prices in NCR, where rice inflation is already positive.
“Sa well-milled rice, there is a low volume of delivery. I suppose this is related to the supply chain, they are experiencing low volume of delivery of well-milled and regular milled rice. Slight increase in the price of rice.
"In one store, there were new varieties for regular milled rice, in October. From 3 varieties to 6 to 7 this month. These new varieties exhibited higher prices. Those are the explanations for NCR. Ang source ng pagtaas ng presyo ng bigas, galing sa regular milled and well milled rice.”
This chart shows food and non-alcoholic beverages inflation in blue, and transport inflation in orange. Transport inflation has been high due to the added cost of protective measures against COVID-19, which includes social distancing measures that prevent groups from sharing the cost of a ride.
Tricycle fare inflation remains elevated. Jeepney and Bus fare also remain high, and well above the national inflation rate of 2.5 percent for the month. This inflation is expected to ease as the economy is slowly reopened, and public transport is allowed to take on more passengers. Unfortunately, food inflation now appears headed higher.
Looking at inflation across commodity groups, education inflation also stands out, accelerating to 1.2 percent from 1 percent in September. Mapa said this was mainly attributed to the higher cost of tuition. Curious, as there are anecdotal accounts of schools cutting tuition fees amid low enrollment numbers.
Education department data places private school enrollment at just over 30 percent of 2019 levels, with overall enrollment down 20 percent from the previous year. Mapa said the new cost of gadgets for online learning was not included in the education inflation rate.
There are also concerns recent storms will create new problems for food producers and supply chains. The latest estimates of damage caused by Typhoon Rolly alone is seen at nearly P60B.
Mapa was unsure if the October inflation report captured the effects of Typhoon Quinta, however, he was certain the effects of Quinta and Rolly will be captured in their next report, saying “defintely nitong November, may mga pagbabago sa presyo dahil sa recent typhoon.”
Price freezes will be used by the government to protect areas hit the hardest by the storms. However, the Bicol Region, ground zero of Typhoon Rolly, was already suffering from the highest inflation rate in the Philippines before the storm hit.
Mapa said the biggest contributor to inflation in the Bicol Region was transport. Transport services will again be at a premium, considering the severe damage caused to infrastructure there.
The region with the lowest inflation rate for October was Central Visayas, which had a rate of 1.3 percent.
Overall 8 regions saw their inflation rates increase in October, including NCR, while 6 saw their inflation rates ease.
Inflation for the bottom 30 percent income households, the poorest of the poor, was again well above that of the national average of 2.5 percent. The basket of goods for the poor has a higher weighting for transportation and food.
Overall, the higher October inflation rate pushed the Philippines back above Vietnam, once again giving the country the highest inflation rate amongst major ASEAN economies. While the Philippines is suffering from a 3-month high in inflation, Vietnam is enjoying a 5-month low.