PH Inflation Soars to 8.1% in December 2022

Inflation in the Philippines soared to a staggering 8.1 percent in December 2022, which is up from the 8 percent posted in November, according to data from the Philippine Statistics Authority (PSA).

The inflation for December brings the full-year average inflation to 5.8 percent, which is the highest it has been since November 2008.

The main drivers behind the increase were higher prices for vegetables, particularly cabbage and rice, as well as fruits like bananas. Other significant contributors included restaurants and accommodation services, as well as housing, water, electricity, gas, and other fuels, according to National Statistician Dennis Mapa in a press briefing.

Moreover, core inflation, which excludes volatile food and energy components, also rose to 6.9 percent in December from 6.5 percent in November.

Meanwhile, food inflation at the national level increased further to 10.6 percent in December from the previous month’s 10.3 percent.

The December inflation rate was slightly below the 8.2 percent median forecast in a Reuters poll but within the Bangko Sentral ng Pilipinas (BSP) forecast of 7.8 percent to 8.6 percent forecast for the month.

In response to the rising inflation and a weak peso, the central bank raised its benchmark interest rate by a total of 350 basis points last year.

While it has not ruled out further rate hikes in 2023, the BSP will be closely monitoring the inflation situation and may adjust its monetary policy accordingly. (GFB)