NATIONAL
Advocates Philippines
Inflation Rises To 5.3% In August 2023
Photo credit: DA
The Philippines experienced a notable uptick in headline inflation in August 2023, with the rate climbing to 5.3 percent from 4.7 percent in July of the same year. This surge brought the national average inflation for the period from January to August 2023 to 6.6 percent, showing an increase from the previous year when inflation was recorded at 6.3 percent for August 2022.
The increase in overall inflation in August 2023 was primarily driven by higher year-on-year increases in heavily-weighted food and non-alcoholic beverages, rising from 6.3 percent to 8.1 percent during the month. Another contributing factor was the annual growth of the transport sector, which shifted from a decline of -4.7 percent in July to an increase of 0.2 percent.
Additionally, the recreation, sport, and culture index recorded an annual increase of 4.9 percent in August 2023, up from 4.7 percent in the previous month.
However, six commodity groups bucked the trend and showed lower inflation rates during the same period:
• Alcoholic beverages and tobacco dropped from 10.9 percent to 10.1 percent.
• Housing, water, electricity, gas, and other fuels decreased from 4.5 percent to 2.5 percent.
• Furnishings, household equipment, and routine household maintenance fell from 5.8 percent to 5.6 percent.
• Education services declined from 3.7 percent to 2.9 percent.
• Restaurants and accommodation services decreased from 7.9 percent to 7.1 percent.
• Personal care and miscellaneous goods and services dropped from 5.6 percent to 5.5 percent.
The indices of the remaining commodity groups maintained their respective previous month's annual increases, while financial services remained at zero growth during the month.
The top three commodity groups contributing to the overall inflation in August 2023 were:
• Food and non-alcoholic beverages with a 57.4 percent share, contributing 3.0 percentage points.
• Restaurants and accommodation services with a 12.8 percent share, contributing 0.7 percentage points.
• Housing, water, electricity, gas, and other fuels with a 10.0 percent share, contributing 0.5 percentage points.
Food inflation at the national level increased to 8.2 percent in August 2023 from 6.3 percent in July 2023, although it remained lower than the 6.5 percent recorded in August 2022.
The acceleration of food inflation in August 2023 was primarily due to higher year-on-year growth rates observed in several key categories, including rice (8.7 percent), vegetables, tubers, plantains, cooking bananas, and pulses (31.9 percent), fish and other seafood (6.9 percent), and fruits and nuts (9.6 percent). Conversely, meat and other parts of slaughtered land animals saw a slower annual decrease of -0.1 percent.
Compared to the previous month, lower annual growth rates during August were observed in categories such as cereals and cereal products, milk and other dairy products, sugar, confectionery and desserts, and ready-made food and other food products. The corn index even registered an annual drop of -0.9 percent during the month.
Food accounted for 53.9 percent of the overall inflation in August 2023, with the highest contributions coming from:
• Cereals and cereal products (including rice, corn, flour, bread, and other bakery products) with a 35.0 percent share, contributing 2.9 percentage points.
• Vegetables, tubers, plantains, cooking bananas, and pulses with a 30.6 percent share, contributing 2.5 percentage points.
• Fish and other seafood with a 13.4 percent share, contributing 1.1 percentage points.
Core inflation, which excludes selected food and energy items, decelerated to 6.1 percent in August 2023 from 6.7 percent in July 2023. The average core inflation for January to August 2023 was 7.4 percent, compared to 4.6 percent in August 2022. Inflation in the National Capital Region (NCR) also accelerated to 5.9 percent from 5.6 percent in the previous month.
Uptrend in NCR Inflation
The uptrend in NCR inflation for August 2023 was primarily attributed to the higher annual increment in food and non-alcoholic beverages, which rose from 6.4 percent to 8.6 percent during the month. Transport also contributed to the uptrend with an inflation rate of 1.4 percent, compared to an annual decline of -3.2 percent in the previous month.
Higher annual increments were observed in the indices of clothing and footwear, health, and recreation, sport, and culture during the month. Conversely, lower inflation rates were noted in categories such as alcoholic beverages and tobacco, housing, water, electricity, gas, and other fuels, furnishings, household equipment, and routine household maintenance, education services, restaurants and accommodation services, and personal care and miscellaneous goods and services.
Overall inflation in areas outside NCR (AONCR) mirrored the national trend, with an increase to 5.2 percent in August 2023 from 4.4 percent in July 2023, but still lower than the 6.5 percent recorded in August 2022.
The acceleration of inflation in AONCR was mainly driven by higher annual increases in food and non-alcoholic beverages and transport. Categories such as recreation, sport, and culture, and education services also saw higher year-on-year increments. Conversely, lower inflation rates were observed in categories including alcoholic beverages and tobacco, housing, water, electricity, gas, and other fuels, furnishings, household equipment, and routine household maintenance, health, restaurants and accommodation services, and personal care and miscellaneous goods and services.
Region III (Central Luzon) had the highest inflation rate during August 2023 at 7.0 percent, while Region VIII (Eastern Visayas) had the lowest inflation rate at 3.1 percent. Among the regions, 12 experienced higher inflation rates in August, while two recorded lower rates, and two remained unchanged from the previous month.
The increase in overall inflation in August 2023 was primarily driven by higher year-on-year increases in heavily-weighted food and non-alcoholic beverages, rising from 6.3 percent to 8.1 percent during the month. Another contributing factor was the annual growth of the transport sector, which shifted from a decline of -4.7 percent in July to an increase of 0.2 percent.
Additionally, the recreation, sport, and culture index recorded an annual increase of 4.9 percent in August 2023, up from 4.7 percent in the previous month.
However, six commodity groups bucked the trend and showed lower inflation rates during the same period:
• Alcoholic beverages and tobacco dropped from 10.9 percent to 10.1 percent.
• Housing, water, electricity, gas, and other fuels decreased from 4.5 percent to 2.5 percent.
• Furnishings, household equipment, and routine household maintenance fell from 5.8 percent to 5.6 percent.
• Education services declined from 3.7 percent to 2.9 percent.
• Restaurants and accommodation services decreased from 7.9 percent to 7.1 percent.
• Personal care and miscellaneous goods and services dropped from 5.6 percent to 5.5 percent.
The indices of the remaining commodity groups maintained their respective previous month's annual increases, while financial services remained at zero growth during the month.
The top three commodity groups contributing to the overall inflation in August 2023 were:
• Food and non-alcoholic beverages with a 57.4 percent share, contributing 3.0 percentage points.
• Restaurants and accommodation services with a 12.8 percent share, contributing 0.7 percentage points.
• Housing, water, electricity, gas, and other fuels with a 10.0 percent share, contributing 0.5 percentage points.
Food inflation at the national level increased to 8.2 percent in August 2023 from 6.3 percent in July 2023, although it remained lower than the 6.5 percent recorded in August 2022.
The acceleration of food inflation in August 2023 was primarily due to higher year-on-year growth rates observed in several key categories, including rice (8.7 percent), vegetables, tubers, plantains, cooking bananas, and pulses (31.9 percent), fish and other seafood (6.9 percent), and fruits and nuts (9.6 percent). Conversely, meat and other parts of slaughtered land animals saw a slower annual decrease of -0.1 percent.
Compared to the previous month, lower annual growth rates during August were observed in categories such as cereals and cereal products, milk and other dairy products, sugar, confectionery and desserts, and ready-made food and other food products. The corn index even registered an annual drop of -0.9 percent during the month.
Food accounted for 53.9 percent of the overall inflation in August 2023, with the highest contributions coming from:
• Cereals and cereal products (including rice, corn, flour, bread, and other bakery products) with a 35.0 percent share, contributing 2.9 percentage points.
• Vegetables, tubers, plantains, cooking bananas, and pulses with a 30.6 percent share, contributing 2.5 percentage points.
• Fish and other seafood with a 13.4 percent share, contributing 1.1 percentage points.
Core inflation, which excludes selected food and energy items, decelerated to 6.1 percent in August 2023 from 6.7 percent in July 2023. The average core inflation for January to August 2023 was 7.4 percent, compared to 4.6 percent in August 2022. Inflation in the National Capital Region (NCR) also accelerated to 5.9 percent from 5.6 percent in the previous month.
Uptrend in NCR Inflation
The uptrend in NCR inflation for August 2023 was primarily attributed to the higher annual increment in food and non-alcoholic beverages, which rose from 6.4 percent to 8.6 percent during the month. Transport also contributed to the uptrend with an inflation rate of 1.4 percent, compared to an annual decline of -3.2 percent in the previous month.
Higher annual increments were observed in the indices of clothing and footwear, health, and recreation, sport, and culture during the month. Conversely, lower inflation rates were noted in categories such as alcoholic beverages and tobacco, housing, water, electricity, gas, and other fuels, furnishings, household equipment, and routine household maintenance, education services, restaurants and accommodation services, and personal care and miscellaneous goods and services.
Overall inflation in areas outside NCR (AONCR) mirrored the national trend, with an increase to 5.2 percent in August 2023 from 4.4 percent in July 2023, but still lower than the 6.5 percent recorded in August 2022.
The acceleration of inflation in AONCR was mainly driven by higher annual increases in food and non-alcoholic beverages and transport. Categories such as recreation, sport, and culture, and education services also saw higher year-on-year increments. Conversely, lower inflation rates were observed in categories including alcoholic beverages and tobacco, housing, water, electricity, gas, and other fuels, furnishings, household equipment, and routine household maintenance, health, restaurants and accommodation services, and personal care and miscellaneous goods and services.
Region III (Central Luzon) had the highest inflation rate during August 2023 at 7.0 percent, while Region VIII (Eastern Visayas) had the lowest inflation rate at 3.1 percent. Among the regions, 12 experienced higher inflation rates in August, while two recorded lower rates, and two remained unchanged from the previous month.
Sep 5, 2023
