The rate of increase in prices or inflation in the Philippines quickened in December 2024 to 2.9% higher than the 2.5% in November bringing the average annual inflation rate to 3.2%, the Philippine Statistics Authority (PSA) reported.
During a press briefing, Undersecretary Claire Dennis Mapa noted that the inflation rate in December was driven by faster growth in prices of housing, water, electricity, gas and other fuels at 2.9 percent during the month from 1.9 percent in the previous month. The annual increase of transport at 0.9 percent during the month from an annual decline of 1.2 percent in November 2024 also contributed to the uptrend.
Headline inflation is a raw figure that reflects changes in the consumer price index (CPI) throughout the entire economy. It differs from core inflation, which is CPI adjusted to exclude food and energy prices, which are volatile.
Recreation, sport and culture also contributed to the uptrend as it recorded a faster annual increase of 2.5 percent in December 2024 from 2.4 percent in the previous month.
In contrast, the following commodity groups registered lower inflation rates during the month:
a. Clothing and footwear, 2.4 percent from 2.6 percent;
b. Health, 2.5 percent from 2.6 percent; and
c. Restaurants and accommodation services, 3.8 percent from 3.9 percent.
The indices of the rest of the commodity groups retained their respective previous month’s inflation rates in December 2024.
The top three commodity groups contributing to the December 2024 overall inflation were the following:
a. Food and non-alcoholic beverages with 44.3 percent share or 1.3 percentage points;
b. Housing, water, electricity, gas and other fuels with 21.4 percent share or 0.6 percentage point; and
c. Restaurants and accommodation services with 12.6 percent share or 0.4 percentage point.
On an annual basis, the Philippines’ annual average inflation rate for 2024 stood at 3.2 percent, which was lower than the 2023 annual average inflation rate of 6.0 percent.
The downtrend in the 2024 annual average inflation at the national level was primarily caused by the lower annual average increase in the index of food and non-alcoholic beverages at 4.4 percent in 2024 from 7.9 percent annual average inflation in 2023. Also contributed to the downtrend was the lower annual average inflation of housing, water, electricity, gas and other fuels at 1.7 percent in 2024 from 4.9 percent annual average inflation in 2023.
Except for education services, the indices of the rest of the commodity groups recorded downtrend in their annual average inflation in 2024 compared with 2023, with the financial services recording an average annual decline of 0.6 percent in 2024 from a zero percent annual average inflation in 2023. Higher annual average increase was observed in the index of education services at 4.3 percent in 2024 from 3.6 percent in 2023.
The top three commodity groups contributing to the 2024 annual average inflation were the following:
a. Food and non-alcoholic beverages with 51.6 percent share or 1.7 percentage points;
b. Restaurants and accommodation services with 14.3 percent share or 0.5 percentage point; and
c. Housing, water, electricity, gas and other fuels with 11.3 percent share or 0.4 percentage point.
Food inflation at the national level remained at 3.5 percent in December 2024. In December 2023, food inflation was higher at 5.5 percent.
Food inflation shared 41.9 percent or 1.2 percentage points to the overall inflation in December 2024. The top three food groups in terms of contribution to the food inflation during the month were the following:
a. Vegetables, tubers, plantains, cooking bananas and pulses with a share of 34.5 percent or 1.2 percentage points;
b. Meat and other parts of slaughtered land animals with a share of 27.4 percent or 1.0 percentage point; and
c. Cereals and cereal products, which includes rice, corn, flour, bread and other bakery products, pasta products, and other cereals, with a share of 13.9 percent or 0.5 percentage point.
In 2024, the annual average food inflation rate was observed at 4.5 percent, lower than the recorded annual average food inflation rate of 8.0 percent in 2023.
Core inflation, which excludes selected food and energy items, increased to 2.8 percent in December 2024 from 2.5 percent in November 2024. In December 2023, core inflation rate was faster at 4.4 percent. The average core inflation rate in 2024 stood at 3.0 percent, lower than the recorded average core inflation rate of 6.6 percent in 2023.
