Headline inflation or the overall inflation in the Philippines slowed down further to 6.6 percent in April 2023 from 7.6 percent in March 2023. The inflation rate in April 2022 was observed at 4.9 percent. This brings the average inflation rate from January to April 2023 to 7.9 percent.
1.1 Main Drivers to the Downward Trend of the Headline Inflation
Among the 13 commodity groups, the downtrend of the overall inflation during the month was mainly brought about by the heavily weighted food and non-alcoholic beverages, which recorded a lower inflation rate of 7.9 percent from 9.3 in March 2023. Transport was the second top contributor with an inflation rate 2.6 percent from 5.3 percent in March 2023. The third primary driver in the slowdown of the headline inflation in April 2023 was housing, water, electricity, gas and other fuels, which recorded a 6.5 percent inflation rate from 7.6 percent in March 2023.
In addition, lower inflation rate was noted for furnishings, household equipment and routine household maintenance at 6.1 percent in April 2023 from 6.2 percent int the previous month.
On the contrary, higher inflation rates were observed in the following commodity groups during the month:
a. Alcoholic beverages and tobacco, 12.7 percent from 12.2 percent; b. Clothing and footwear, 5.1 percent from 5.0 percent; c. Health, 4.1 percent from 3.9 percent; d. Recreation, sport and culture, 4.7 percent from 4.6 percent; e. Restaurants and accommodation services, 8.6 percent from 8.3 percent; f. Personal care, 5.7 percent from 5.6 percent.
The indices of information and communication; and education services retained their corresponding previous month’s annual increments at 0.7 percent and 3.6 percent. Likewise, the annual rate in the financial services index remained at zero percent.
1.2 Main Contributors to the Headline Inflation
The top three commodity groups contributing to the April 2023 overall inflation of 6.6 percent were the following:
a. Food and non-alcoholic beverages with 45.3 percent share or 3.0 percentage points; b. Housing, water, electricity, gas and other fuels at 21.1 percent share or 1.4 percentage points; and c. Restaurants and accommodation services at 12.6 percent share or 0.8 percentage point.
2. Food Inflation
Food inflation at the national level slowed down further to 8.0 percent in April 2023 from 9.5 percent in March 2023. In April 2022, food inflation was lower at 4.0 percent.
2.1 Main Drivers to the Downward Trend of Food Inflation
Vegetables, tubers, plantains, cooking bananas and pulses remained as the primary driver of the lower food inflation rate of 10.0 percent in April 2023 from 20.0 percent in the previous month. This was followed by fish and other seafood with an annual increment of 7.0 percent during the month from 9.9 percent. Meat and other parts of slaughtered land animals ranked third, recording a 4.2 percent inflation during the month from 4.6 percent in the previous month.
Lower inflation rates during the month were also noted in the indices of the following food items:
a. Corn, 8.4 percent from 11.7 percent; b. Milk, other dairy products and eggs, 13.0 percent from 13.6 percent; c. Oils and fats, 11.7 percent from 14.7 percent; d. Sugar, confectionery and desserts, 33.7 percent from 35.2 percent; and e. Ready-made food and other food products not elsewhere classified, 9.5 percent from 10.0 percent.
Meanwhile, compared with their previous month’s inflation rates, higher year-on-year growth rates were observed in the indices of rice at 2.9 percent from 2.6 percent, and fruits and nuts at 14.7 percent from 13.0 percent.
The indices for flour, bread and other bakery products, pasta products, and other cereals had an annual growth rate of 11.7 percent for three consecutive months.
2.2 Main Contributors to the Food Inflation
In terms of contribution to the April 2023 headline inflation, food shared 42.1 percent or 2.8 percentage points. Of the food groups, the top contributors to food inflation were the following:
a. Cereals and cereal products, which includes rice, corn, flour, bread and other bakery products, with 24.0 percent share or 1.9 percentage points; b. Fish and other seafood with 14.3 percent share or 1.1 percentage points; and c. Milk, other dairy products and eggs with 13.6 percent share or 1.1 percentage points.
Source: PSA