Higher inflation in Dec feared

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    Facilitating goods. November inflation was pushed by higher prices of important food items. (Photo by Rhoy Cobilla)

    The Departments of Agriculture (DA) and Transportation (DOTr) may need to facilitate the movement of food items, the Department of Finance (DOF) said yesterday, after the inflation rate rose in November amid higher prices of food products.

    Laban Konsyumer Inc. (LKI) meanwhile warned of higher inflation this month following the unabated increases in prices of basic necessities especially agricultural and marine products.

    The Philippine Statistics Authority reported last Friday the country’s inflation accelerated to 3.3 percent in November from 2.5 percent in October and 1.3 percent in November last year, bringing the year-to-date inflation to 2.6 percent.

    The DOF in its latest economic bulletin said the surge in November price level is partly due to base effects and mainly because of higher prices of important food items.

    “The inflation rate is still within the two to four percent inflation target range,” the DOF said.

    “However, to ensure prompt price normalization, the DA and DOTr may need to facilitate movement of food supplies from imports and food-surplus regions,” it added.

    The average food prices increased by 4.49 percent, up from 2.13 percent the previous month, driven by the uptick in the price of meat (8.15 percent), fish (5.32 percent), and vegetables (14.6 percent), the latter primarily due to the series of typhoons that swept the country, the DOF said.

    The agency said the decline in the price of fuels and utilities (-2.54 percent) and rice (-0.15 percent) helped dampen the increase in prices of meat, fish and vegetables and the double-digit increase in the price of transport services (16.29 percent).

    Meanwhile, non-food inflation continued to trend down from 2.3 percent in October to 2.2 percent this month driven by lower prices of electricity, gas and other fuels (-2.54 percent).

    In a statement last Friday, the National Economic and Development Authority (NEDA) said the combined amount of damage and losses to the agriculture sector due to typhoons Ofel, Nika, Pepito, Quinta, Rolly and Ulysses amounted to P15.3 billion, as per the DA’s latest estimates.

    Among the regions, Bicol was the most affected, followed by Calabarzon, Cagayan Valley and Central Luzon.

    “Our experience with the recent typhoons has highlighted the need for long-term engineering interventions, reforestation, and coordinated flood management systems across different local government units and the need to intensify the distribution of climate-resilient technologies and other production support assistance to mitigate production loss in the agriculture sector,” Karl Kendrick Chua, acting socioeconomic planning secretary, said.

    The NEDA chief added the Quick Response Fund can also be utilized to repair and rehabilitate production facilities and irrigation systems damaged by the recent typhoons.

    Meanwhile, LKI president Vic Dimagiba in a statement said blamed the higher inflation in November to the failure of concerned government agencies to enforce the price freeze data set for agriculture products.

    “Enforcement was feeble. December will see higher inflation as consumers buy more and the price freeze remains not complied,” Dimagiba said.

    He concurred with the DOF to include the entire supply chain in ensuring sufficient foodstuff.