Inflation slower but not for the poor – IBON

January 5, 2024

by IBON Foundation

The economic managers shouldn’t be too pleased with the tapering of overall December 2023 inflation, research group IBON said, considering the poorest 30% of households are actually experiencing higher inflation. The group said that this shows the Marcos Jr administration’s measures to tame inflation, particularly focusing on import liberalization, are not effective in protecting poor Filipinos as it claims.

The Philippine Statistics Authority (PSA) reported slower year-on-year headline inflation at 3.9% in December 2023 from 4.1% in November 2023. The main causes for deceleration were lower inflation for housing, water, electricity, gas and other fuels (to 1.5% from 2.5%) and food and non-alcoholic beverages (to 5.4% from 5.7%). Yet, despite lower food inflation, rice inflation for December 2023 increased to 19.6%, the highest since March 2009 (22.9%).

IBON however noted that overall inflation for the bottom 30% income households instead increased from 4.9% to 5.0 percent. This was mainly attributed to inflation increase for food and non-alcoholic beverages (to 7.4% from 7.2%), transport (to 1.5% from 0.9%) and health (to 3.2% from 3.1%). Rice inflation was worse for the poorest households at 21.4% and was a main driver for higher food inflation for them.

The group said this means the government’s policies to address high inflation have not done much for the poorest Filipinos who are burdened more with high prices. For instance, five years after the passage of the Rice Liberalization Act, the price of the country’s primary staple food did not remain low as government promised to be the main benefit from liberalization. The cost of well milled rice has jumped to almost Php54/kilo and regular milled rice to over Php48/kilo nationwide as of December 2023.

IBON said that for government to still tout and pursue importation despite its obvious failure to control inflation is a slap in the face for millions of poor Filipinos already struggling to put food on their tables with little or no incomes.