Prices further rise in December amid holiday spending

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Metro Manila (CNN Philippines, January 5) — Filipinos dealt with higher prices during the holidays, with vegetable prices in December at their highest since February 1999, the head of the Philippine Statistics Authority said on Thursday.

During a briefing, National Statistician Dennis Mapa said the inflation rate, or pace of price increase, last month soared to a fresh 14-year high at 8.1%, the highest since November 2008 at 9.1%.

It was also slightly higher than the November rate of 8%.

The December inflation rate is within the 7.8%-8.6% forecast range of the Bangko Sentral ng Pilipinas for the month.

In an earlier statement, the central bank said inflation would remain high in December due to rising cost of power and agricultural products.

The drivers of inflation last month were food and non-alcoholic beverages, which recorded a 10.2% increase, contributing a 38.9% share to the overall inflation.

Food inflation alone hit 10.6%, with vegetable inflation surging to 32.4%, the highest since February 1999, Mapa said.

"Malaki 'yung contribution nitong vegetables dito sa ating (Vegetables have a big contribution to our) food inflation," he said.

Mapa also said onion prices had a "substantial" contribution to inflation.

The Department of Agriculture earlier set a suggested retail price for red onions at ₱250 per kilogram after it found out that its price skyrocketed to a whopping ₱720 per kilogram.

READ: Red onion prices soar to over ₱700 per kilo

Imposing this SRP, however, was seen as a "band-aid" approach from the Marcos administration, House Deputy Minority leader and ACT Teachers party-list Rep. France Castro said in a statement. She noted that the government must focus on stomping out smuggling, which has been "killing" local producers, while providing boosted support for farmers.

The agriculture department expects onion supply to increase and prices to go down during the peak harvest season from March to April.

Meanwhile, other groups driving December's inflation include restaurant and accommodation services, housing, water, electricity, gas, and other fuels.

Last month's figure brought the average inflation from January-December 2022 to 5.8%.

Mapa said the inflation rate in Metro Manila also climbed to 7.6% in December, with restaurant and accommodation services as the biggest commodity group driving inflation.

Faster inflation was also recorded in areas outside Metro Manila, still blamed on rapid increases in food prices and restaurant and accommodation services.

Western Visayas had the highest inflation among areas outside Metro Manila with 10.5%, way faster than the 9.6% recorded in November 2022.

The BSP, meanwhile, said it is "prepared" to take all policy actions necessary to tame inflation.

"Upside risks continue to dominate the inflation outlook up to 2023 while remaining broadly balanced in 2024," it said in a statement.

"The BSP remains prepared to take all monetary policy action necessary to bring inflation back to a target-consistent path over the medium-term," the central bank added.

The government has kept the inflation target at 2% to 4% for 2023.