The overall year-on-year pace in the prices of widely used goods picked up for the third straight month in January by its fastest pace in eight months, the government reported this morning.

Preliminary data from the Philippine Statistics Authority (PSA) showed headline inflation at 2.9% last month, picking up from the 2.5% pace in December, albeit still slower than the 4.4% inflation rate in January 2019.

The January inflation result marked the fastest pace in eight months or since the 3.2% reading in May 2019.

The latest headline figure is higher than the 2.7% median in a BusinessWorld poll conducted late last week and falls within the 2.5-3.3% estimate given by the Bangko Sentral ng Pilipinas (BSP) for January and 2-4% for the year.

Core inflation, which discounted volatile prices of food and fuel, stood at 3.3% in January, picking up from 3.1% the previous month and the fastest since the 3.5% in May 2019.

“The heavily-weighted food and non-alcoholic beverages index, which registered an annual increment of 2.2% [from 1.7% in December 2019], primarily contributed to the uptrend of inflation in January 2020,” the PSA said in a statement.

The PSA also noted higher annual increases in the following commodity groups: alcoholic beverages and tobacco (19.2% from 18.4% in December 2019); clothing and footwear (2.7% from 2.6%); housing, water, electricity, gas, and other fuels (2.5% from 1.9%); transport (3% from 2.2%); recreation and culture (1.5% from 1.4%); and education (4.7% from 4.6%).

The food-alone index also posted an inflation rate of 2.1%, an increase from December 2019’s 1.7%.

Likewise, the PSA reported preliminary figures for inflation as experienced by low-income families for January. That month, inflation for the bottom 30% of income households grew 2.6%, faster than the 2.1% in December, but slower than the 4.9% in January 2019.

The consumer price index (CPI) for the bottom 30% reconfigures the model basket of goods in order to reflect the spending patterns of the poor. This compared to the headline CPI which measures inflation as experienced by the average household.

This also marked the first time the bottom 30% CPI used 2012 prices as the base year. Prior to the rebasing, the bottom 30% CPI used 2000 prices. — Carmina Angelica V. Olano

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