Puerto Princesa City and Palawan experienced notable slowdowns in inflation in January 2024, signaling a period of economic adjustment and reflecting a balance in supply and demand dynamics, according to the local office of the Philippine Statistics Authority (PSA).

With inflation rates dropping to 4.1% and 3.7% respectively, due to a stable food and transportation sector, the city and the province showed signs of relative economic stability amidst the country’ broader efforts to manage inflation.

However, the agency cautioned that a decelerated inflation rate isn’t an outright indicator of economic health, amidst concerns over consumer spending patterns and impending electricity price hikes.

The latest report from the PSA indicates a decrease in inflation rates, with Puerto Princesa City falling to 4.1% from 4.8% and Palawan’s rate reducing to 3.7% from 4.9% in December 2023.

In both areas, the primary contributors to the slowdown were the food and non-alcoholic beverages sector, with the transport sector, including fuel and automotive repairs, closely following.

Maria Lalaine Rodriguez, chief statistics specialist at PSA Palawan, reported that the commodity group of food and non-alcoholic beverages experienced minimal fluctuations in January 2024. This stability is attributed to consumers stockpiling food and non-alcoholic beverages purchased in the previous month.

She also noted that the northeast winds (amihan) brought favorable weather conditions in the first month of the year, despite rising temperatures. This weather allowed fishermen to venture further into the ocean for their catch, meeting the increased demand for seafood from individuals seeking alternatives to meat and meat products after the holiday season.

Rodriguez said that, in fact, the inflation rate for Fish and Other Seafood in Palawan was a mere 0.1 percent in January 2024, marking a steep drop from the 7.4% recorded in December 2023.

Meanwhile, Puerto Princesa experienced a more pronounced decline in its food inflation, particularly within the categories of vegetables, tubers, plantains, cooking bananas, and pulses, which plummeted from -8.4% in December 2023 to -19.7% in January 2024.

Similarly, the inflation rate for Fish and Other Seafood in Puerto Princesa fell from 4.4% in December 2023 to -1.2% in January 2024.

“Kung mapapansin ninyo, hindi tuloy-tuloy yung lakas ng hangin kaya nakakapaglayag pa ang ating mga fishermen. Katulad nung namalengke ako ine-expect ko mataas ang presyo ng isda (…). Tumaas din [ang consumers ng seafood] kasi sawa tayo sa karne. Ine-expect na biglang tumubo sila nagmamahalan tapos biglang bugso ng amihan so normal na tumaas siya,” Rodriguez said.

Another factor contributing to the slowed inflation rate was the price decrease in milk, dairy products, and eggs, which fell from 10.1% in December 2023 to 7.8% in January 2024 in Palawan, and from 6.8% to 5% in Puerto Princesa City over the same period.

This decrease was attributed to consumers having ample supplies in their pantries, resulting from bulk purchases of eggs and baking ingredients during the holiday season for making cakes and leche flan.

She said that only food category exhibiting a significant difference in inflation rates between Palawan and Puerto Princesa City was rice.

While the inflation rate for rice in Puerto Princesa City slightly decreased from 13.7% in December 2023 to 13.6% in January 2024, it increased from 13.8% to 14% in Palawan during the same timeframe.

“Sa Palawan, up ang rice [inflation rate] natin. Nung December nasa 13.8 lang siya pero ngayon nasa 14 ang kaniyang inflation. Hindi natin masabi [kung tataas pa sa February] kasi tagtuyot tayo,” Rodriguez noted.

Rodriguez further stated that a decelerated inflation rate does not necessarily indicate an improved economy. She referred to the consensus that the national headline inflation for the Philippines, reported at 2.8% in January 2024 compared to last year’s 8.7%, was “too low.”

“May tina-target din ang ating Central Bank. Siya ang nagii-stabilize ng ating economy dahil Central Bank ang gumagawa ng mga fiscal policies para ang ating economy ay di masyadong maapektuhan so importante din yung [level ng] interest rates,” Rodriguez said.

She mentioned that this was the case because the typical response to such a low inflation rate involves hoarding items like real property or goods, buying them when they are cheap, and selling them when demand is high to increase profits.

“Pag masyadong mababa ng inflation, yung iba hindi masyadong mamimili kaya nakakaapekto sa ating economy, kasi ise-save niya yung pera niya. Walang umiikot na pera sa ating economy. (…) Katulad niyan mababa ang dollar, mamimili ang ibang may pera, iho-hold nila yun then aantayin nila na tumaas yung dollar saka nila ibebenta. The same is true pag nakaka-affect ng inflation,” she added.

The only commodity group that has steadily seen an increase in its inflation rate in Palawan and Puerto Princesa during the transition between years is housing, water, electricity, gas, and other fuels.

This rise is attributed to higher power consumption and electricity price hikes.