Headline inflation for the whole year of 2021 averaged 4.5 percent, which is above the Government’s full-year inflation target range of 3.0 percent ± 1.0 percentage point, the Bangko Sentral ng Pilipinas (BSP) stated this week.
Inflation in December had slowed down further to 3.6 percent year-on-year from 4.2 percent in the previous month.
The latest inflation outturn was within the BSP’s monthly forecast range of 3.5-4.3 percent for the month. Similarly, core inflation, which excludes selected volatile food and energy items to depict underlying demand-side price pressures, eased to 3.0 percent year-on-year in December from 3.3 percent in the previous month.
On a month-on-month seasonally adjusted basis, inflation was nil in December from 0.5 percent in November.
Both food and non-food inflation were lower in December compared to the previous month. Year-on-year food inflation continued to decelerate due to slower price increases of key food items such as corn, fish, and rice. Year-on-year vegetable inflation shrunk further in December owing in part to base effects.
Meanwhile, the decline in global crude oil prices led to downward adjustments in domestic petroleum prices, which contributed to lower non-food inflation.
The December inflation outturn supports the BSP’s projections that inflation would ease close to the midpoint of the target range in 2022 and 2023 following the easing of supply-side price pressures.
However, it should also be noted that supply disruptions from typhoon Odette will likely result in a temporary uptick in the prices of food items and other necessities over the near term.
The BSP said it will incorporate the typhoon’s impact into its projections once more information from various regions become available.