NATIONAL
Advocates Philippines
Philippines' Headline Inflation Hits Lowest Point In Over Three Years At 2.8% In January 2024
Photo credit: PCO
The Philippines experienced a significant slowdown in headline inflation, marking a 2.8% rate in January 2024, the lowest since October 2020. This reflects a notable decrease from the 3.9% recorded in December 2023 and the 8.7% reported in January 2023.
Factors Contributing to the Decline in Headline Inflation
The decline in overall inflation in January 2024 was primarily driven by a slower annual increase in food and non-alcoholic beverages, dropping to 3.5% from the previous month's 5.4%. Additionally, housing, water, electricity, gas, and other fuels saw a slower annual increase of 0.7% compared to 1.5% in December 2023.
Other commodity groups contributing to the downtrend included alcoholic beverages and tobacco, clothing and footwear, furnishings, household equipment, routine household maintenance, health, recreation, sport and culture, restaurants and accommodation services, and personal care, and miscellaneous goods and services.
However, education services recorded a higher annual increase of 3.8% in January 2024.
Key Contributors to Headline Inflation
The top three contributors to the January 2024 overall inflation were food and non-alcoholic beverages (47.1%), restaurants and accommodation services (18.9%), and alcoholic beverages and tobacco (6.5%).
Food Inflation
Food inflation at the national level eased to 3.3% in January 2024 from 5.5% in the previous month and 11.2% in January 2023.
Factors Driving the Downward Trend in Food Inflation
The deceleration in food inflation was influenced by a faster year-on-year decline in the index of vegetables, tubers, plantains, cooking bananas, and pulses. Fish and other seafood also contributed to the downtrend with a slower inflation rate.
Annual declines were observed in corn, oils and fats, meat and other parts of slaughtered land animals, and sugar, confectionery, and desserts.
Primary Contributors to Food Inflation
Cereals and cereal products, milk, other dairy products, and eggs, and fruits and nuts were the main contributors to food inflation during January 2024.
Core Inflation
Core inflation, excluding selected food and energy items, decelerated to 3.8% in January 2024 from 4.4% in the previous month and 7.4% in January 2023.
National Capital Region (NCR)
Inflation rate in NCR also decelerated to 2.8% in January 2024 from 3.5% in December 2023. The lower inflation rate was mainly influenced by a slower annual increase in housing, water, electricity, gas, and other fuels.
Areas Outside NCR (AONCR)
Inflation rate in AONCR decelerated to 2.8% in January 2024 from 4.0% in December 2023. Factors contributing to the decline included slower annual increases in food and non-alcoholic beverages, housing, water, electricity, gas, and other fuels.
All regions outside NCR recorded slower inflation rates in January 2024 relative to their respective December 2023 rates. Region II (Cagayan Valley) and Region I (Ilocos Region) registered the lowest inflation rate at 1.5%, while Region XI (Davao Region) had the highest at 4.4%.
Factors Contributing to the Decline in Headline Inflation
The decline in overall inflation in January 2024 was primarily driven by a slower annual increase in food and non-alcoholic beverages, dropping to 3.5% from the previous month's 5.4%. Additionally, housing, water, electricity, gas, and other fuels saw a slower annual increase of 0.7% compared to 1.5% in December 2023.
Other commodity groups contributing to the downtrend included alcoholic beverages and tobacco, clothing and footwear, furnishings, household equipment, routine household maintenance, health, recreation, sport and culture, restaurants and accommodation services, and personal care, and miscellaneous goods and services.
However, education services recorded a higher annual increase of 3.8% in January 2024.
Key Contributors to Headline Inflation
The top three contributors to the January 2024 overall inflation were food and non-alcoholic beverages (47.1%), restaurants and accommodation services (18.9%), and alcoholic beverages and tobacco (6.5%).
Food Inflation
Food inflation at the national level eased to 3.3% in January 2024 from 5.5% in the previous month and 11.2% in January 2023.
Factors Driving the Downward Trend in Food Inflation
The deceleration in food inflation was influenced by a faster year-on-year decline in the index of vegetables, tubers, plantains, cooking bananas, and pulses. Fish and other seafood also contributed to the downtrend with a slower inflation rate.
Annual declines were observed in corn, oils and fats, meat and other parts of slaughtered land animals, and sugar, confectionery, and desserts.
Primary Contributors to Food Inflation
Cereals and cereal products, milk, other dairy products, and eggs, and fruits and nuts were the main contributors to food inflation during January 2024.
Core Inflation
Core inflation, excluding selected food and energy items, decelerated to 3.8% in January 2024 from 4.4% in the previous month and 7.4% in January 2023.
National Capital Region (NCR)
Inflation rate in NCR also decelerated to 2.8% in January 2024 from 3.5% in December 2023. The lower inflation rate was mainly influenced by a slower annual increase in housing, water, electricity, gas, and other fuels.
Areas Outside NCR (AONCR)
Inflation rate in AONCR decelerated to 2.8% in January 2024 from 4.0% in December 2023. Factors contributing to the decline included slower annual increases in food and non-alcoholic beverages, housing, water, electricity, gas, and other fuels.
All regions outside NCR recorded slower inflation rates in January 2024 relative to their respective December 2023 rates. Region II (Cagayan Valley) and Region I (Ilocos Region) registered the lowest inflation rate at 1.5%, while Region XI (Davao Region) had the highest at 4.4%.
Feb 6, 2024
