December inflation fastest in six months

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

Preliminary data from the Philippine Statistics Authority (PSA) showed headline inflation at 2.5% last month, marking the fastest pace since June’s 2.7%, albeit still slower than the 5.1% in December 2018.

The December figure is higher than the 2.1% median in a BusinessWorld poll conducted late last week and falls near the high-end of the 1.8-2.6% estimate given by the Bangko Sentral ng Pilipinas (BSP) for last month.

Full-year inflation came in at 2.5% against the BSP’s 2-4% target range for 2019 and its full-year forecast of 2.4%. This was slower than the 5.2% average inflation rate posted in 2018 and marked the slowest since 2016’s 1.3%.

Core inflation, which discounted volatile prices of food and fuel, stood at 3.1% in December, picking up from 2.6% the previous month and the fastest since the 3.2% in July 2019.

For the entire year, core inflation averaged 3.2%, slower than 2018’s 4.2%.

“The uptrend in the inflation in December 2019 was mainly brought about by the 1.7% annual increment recorded in the heavily-weighted food and non-alcoholic beverages index. In the previous month, food and non-alcoholic beverages index registered an annual rate of zero percent,” the PSA said in a statement.

The food-alone index posted an inflation rate of 1.7%, a reversal from November’s 0.2% decline. — Marissa Mae M. Ramos