Prices of goods rose at a much faster pace in 2021 than what the government aimed for, as Filipinos struggled to make ends meet amid the coronavirus crisis.
The Philippine Statistics Authority on Wednesday, January 5, reported that inflation for the entire 2021 hit 4.5%, driven mainly by higher food prices.
President Rodrigo Duterte’s economic team aimed for inflation to fall within 2% to 4%. But since it only settled within the target band once in 2021, at 4% in July, analysts did not expect the full-year figure to fall within desirable levels.
The inflation rate for the entire 2021 was pulled down by the 3.6% recorded in December, a decline compared to the 4.2% in November.
Vegetable prices deflated by 10% in December, while fish and rice prices rose at a slower pace by 7% and 0.9%, respectively.
National Statistician Dennis Mapa said prices of meat, transportation, and fuel were the top drivers of inflation in the entire 2021.
To tame prices, Socioeconomic Planning Secretary Karl Chua said the local supply of meat, especially pork, needs to be augmented by pork imports.
Chua also called for the distribution of more imported pork outside Metro Manila, noting that meat is among the top three drivers of inflation in 14 out of 16 regions outside the capital in December.
“With the National Capital Region (NCR) and the neighboring provinces of Cavite, Rizal, and Bulacan now under Alert Level 3, it is important to ensure affordable food prices and the continued delivery of goods and services. To temper inflation in meat, especially pork, the government is working to increase local supply and ensure regular unloading of stocks from cold storages,” Chua said.
The inflation rate in NCR slightly eased to 2.8% in December from the 2.9% posted in November. This was due to prices of petroleum and some food items rising at a slower pace.
Meanwhile, inflation outside the capital region eased to 3.9% in December from 4.5% in November, as vegetable prices dropped.
The Zamboanga Peninsula and the Davao Region posted the highest inflation rates, both at 6.1%, while the Bangsamoro Autonomous Region in Muslim Mindanao posted the lowest at 2.1%.
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said supply disruptions and agricultural damage from Typhoon Odette (Rai) will likely result in a temporary uptick in the prices of food items.
“As with previous episodes of natural disasters, the effective implementation of non-monetary government intervention measures to ensure adequate domestic food supply must be sustained in order to mitigate potential supply side pressures on inflation,” Diokno said.
The BSP projected that inflation would ease close to the midpoint of the 2%-4% target range in 2022.
Prices refusing to cool down at a time when Filipinos were struggling to find quality jobs put pressure on households’ budgets.
As of the first half of 2021, poverty incidence had risen to 23.7%, equivalent to 26.1 million Filipinos.
While there are now more jobs available due to the economy reopening, underemployment, which refers to employed people who want additional hours of work, hit 16.1% in October, equivalent to 7.04 million people