Headline inflation slowed down for the third consecutive month in April 2023 to 6.6 percent from the 7.6 percent in March, bringing the average inflation rate from January to April to 7.9 percent.
“This is positive news. The recent inflation numbers indicate that we are on track to managing inflation to within target sometime in the fourth quarter, if not sooner, and near the midpoint of the target range of 2.0 to 4.0 percent by next year,” Finance Secretary Benjamin Diokno said.
The inflation rate stands closer to the lower bound of the Bangko Sentral ng Pilipinas (BSP)’s inflation forecast range of 6.3 to 7.1 percent for April.
This sustained downtrend is due to the lower contribution of Food and non-alcoholic beverages, Transport, and Housing, water, electricity, gas and other fuels to overall inflation.
“The consistent decline in inflation rate over the past three months clearly demonstrates that the whole-of-government approach to tackling inflationary pressures is bearing fruit,” Secretary Diokno added.
Food and non-alcoholic beverages recorded a lower inflation rate of 7.9 percent from 9.3 in March 2023. This is followed by Transport at 2.6 percent (previously recorded at 5.3 percent), and Housing, water, electricity, gas and other fuels at 6.5 percent (previously at 7.6 percent).
“This downward trend is supported by the moderation in food inflation based on DA survey data showing price declines in some vegetables and sugar as supply improved. The end of closed fishing season also contributed to the lowering of fish prices,” Secretary Diokno said.
Particularly, vegetables, tubers, plantains, cooking bananas and pulses were the main drivers of the lower food inflation rate of 10.0 percent in April from 20.0 percent in the previous month.
This is followed by fish and other seafood at 7.0 percent and meat and other parts of slaughtered land animals at 4.2 percent.
Meanwhile, the main contributors to food inflation for the month of April are Cereals and cereal products, which includes rice, corn, flour, bread and other bakery products, contributing 1.9 percentage points (ppt); Fish and other seafood (1.1 ppt); and Milk, other dairy products and eggs with (1.1 ppt).
Core inflation, which excludes selected volatile food and energy items, slowed down to 7.9 percent in April 2023 from 8.0 percent in March, bringing the average core inflation for the first four months of the year to 7.8 percent.
In the National Capital Region (NCR), inflation slowed down further to 7.1 percent in April 2023 from 7.8 percent in March due to the slower annual increase in Housing, water, electricity, gas and other fuels at 6.8 percent, Food and non-alcoholic beverages at 8.3 percent, and Transport at 4.3 percent.
As a manifestation of the government’s resolve to mitigate inflation, the Inter-agency Committee on Inflation and Market Outlook (IAC-IMO) convened last April 20, 2023 to deliberate on strategies aimed at managing both food and non-food inflation in the short- and medium-to-long-term.
The IAC-IMO serves as an advisory body to the Economic Development Group (EDG) on measures that would keep inflation within the government’s inflation targets.
To manage food inflation, the government is taking decisive action to boost agricultural production, reduce restrictions on imports to augment supply, and directly connect farmers with consumers in the near-term.
Moreover, the government is tackling non-food inflation by promoting energy and water conservation measures to mitigate demand-side pressures. The strategy also aims to protect vulnerable sectors through targeted subsidies and cash transfers while maintaining fiscal discipline to avoid aggravating inflation.