Prices of goods in NCR grew slower in 2024

Retail prices of goods in Metro Manila grew at 1.8 percent in 2024, lower than the 4.5 percent in 2023, according to data from the Philippine Statistics Authority (PSA).

In its latest report, the PSA attributed the decline of the general retail price index (GRPI) in NCR to the slower annual average increase in food prices at 2.4 percent in 2024 from 8.2 percent in 2023.

On the other hand, a higher annual increase was recorded in the prices of crude materials, inedible except fuels at 1.1 percent during the month, a slight movement compared to the 1.0 percent in October 2024.

Slower annual increases were also observed in the indices of some commodities.

Prices of beverages and tobacco grew slower at 3.5 percent in 2024 from 5.9 percent in 2023; crude materials at 1.0 percent from 4.8 percent; chemicals, including animal vegetable and oils and fats by 2.4 percent from 3.2 percent; manufactured goods classified chiefly by materials at 1.3 percent from 2.7 percent; machinery and transport equipment at 0.5 percent from 1.4 percent; and miscellaneous articles at 1.4 percent from 1.7 percent.

However, the prices of mineral fuels, lubricants and related materials recorded an annual average increase of 0.4 percent in 2024 from an annual decline of 4.5 percent in 2023.

In December 2024, the GRPI in Metro Manila was at 1.4 percent, slightly higher than the 1.3 percent growth in the previous month.

The PSA cited the slower annual decrease in the index of mineral fuels, lubricants and related materials, whose prices fell by 0.3 percent from 3.0 percent in the previous month.

Meanwhile, higher annual increases were noted in the indices of beverages and tobacco at 3.9 percent from 3.6 percent in November 2024 and manufactured goods at 1.5 percent from 1.3 percent.

Four commodity groups

But slower annual increases were noted in the indices of four commodity groups. Food prices in December 2024 slightly declined to 1.9 percent from 2.0 percent in November; crude materials, inedible except fuels, 0.7 percent from 1.1 percent; machinery and transport equipment, 0.2 percent from 0.3 percent; and miscellaneous manufactured articles, 1.4 percent from 1.5 percent.

Chemicals, including animal and vegetable oils and fats, retained its previous month's annual rate of 2.5 percent.

The GRPI measures changes in commodity prices at which retailers sell their goods to consumers or end-users. It is also used to monitor the economic situation of the retail trade sector.

The wholesale and retail trade sector is the economy's backbone, contributing P4.4 trillion to the country's gross domestic product (GDP) and employing over 10.3 million Filipinos, the Department of Trade and Industry (DTI) said.

In partnership with the Philippine Retailers Association and Supply Chain Management Association of the Philippines, DTI started discussions in the last quarter of 2024 to create a comprehensive roadmap dubbed the Job Blueprint to further energize the wholesale and retail trade sector.

It aims also to address also aims workforce development, digital transformation, supply chain optimization and the regulatory landscape.

Source: Manila Times

Jobless rate drops to 3.2%

Unemployment fell to 3.2 percent in November — the second-lowest monthly rate in 2024 — as the holiday season led to more jobs for Filipinos, the Philippine Statistics Authority said on Wednesday.

The jobless rate improved from 3.9 percent in October and 3.6 percent a year earlier. It was also the lowest since June's 3.1 percent and brought year-to-date unemployment to 3.9 percent.

The November result was equivalent to 1.66 million unemployed Filipinos, lower than October's 1.97 million and the year-earlier 1.83 million.

National Statistician Claire Dennis Mapa attributed the gain to more job opportunities during the holiday season. In particular, he told reporters that the number of people working in accommodation and food services rose by over 500,000 during the month.

Underemployment — which counts those looking for more work or an extra job — also improved to 10.8 percent from 12.6 percent a month earlier and November 2023's 11.7 percent.

The number of the underemployed was said to be 5.35 million, improving from 6.08 million in October and 5.79 million a year ago.

With employment having improved to 96.8 percent from 96.1 percent in the previous month and 96.4 percent in November 2023, the number of Filipinos with jobs reached 49.54 million, higher than October's 48.16 million, but slightly lower than the year-earlier 49.64 million.

The labor force participation rate similarly improved to 64.6 percent from the month-earlier 63.3 percent, but fell from November 2023's 65.9 percent.

The services sector remained the main source of jobs, accounting for 63.1 percent of the employed. Agriculture and industry followed with 20 percent and 17.9 percent, respectively.

Wage and salary workers comprised 68.8 percent of those with jobs, followed by the self-employed at 27.8 percent.

Socioeconomic Planning Secretary Arsenio Balisacan, in a statement, said the government was prioritizing job quality and income improvements in order to sustain the labor market gains.

"Our labor market remains robust, with consistently high employment rates and reduced underemployment," he also said.

"The next step is to expand business and employment opportunities to enable more Filipinos to actively and productively contribute to the economy."

Balisacan said the government was keen to encourage business upgrading and skills training programs to ensure that jobs offer competitive wages as "our workers raise their productivity by developing their human capital."

"The government needs to facilitate the adoption of alternative work arrangements to account for workers' evolving preferences while considering organizations' emerging demands," he added.

It will also focus on "accelerating government programs that will increase employability, especially among the youth."

Source: Manila Times

Inflation accelerated for a third straight month in December

Inflation accelerated for a third straight month in December amid a faster rise in food, utility and transport prices, the Philippine Statistics Authority (PSA) said.

Preliminary data from the PSA showed the consumer price index (CPI) rose to 2.9% year on year in December from 2.5% in November but was slower than 3.9% a year earlier.

It also settled within the 2.3%-3.1% forecast for the month given by the Bangko Sentral ng Pilipinas (BSP).

December brought 2024 inflation to 3.2%, in line with the BSP’s forecast. This was the first time that full-year inflation fell within the central bank’s 2-4% target since 2021, when inflation averaged 3.9%. It was also the slowest since 2.4% in 2020.

“On balance, the within-target inflation outlook and well-anchored inflation expectations continue to support the BSP’s shift toward a less restrictive monetary policy. Nonetheless, the monetary authority will continue to closely monitor the emerging upside risks to inflation, notably geopolitical factors,” the central bank said in a statement.

PSA data showed core inflation, which discounts volatile prices of food and fuel, stood at 2.8% in December — faster than the previous month’s 2.5% but slower than the 4.4% a year ago.

For the entire year, core inflation averaged 3%, easing from 6.6% in 2023.

National Statistician Claire Dennis S. Mapa said December inflation was mainly due to the housing, water, electricity, gas and other fuels index, which accelerated to 2.9% from 1.9% a month earlier and 1.5% in the previous year.

The index accounted for more than half or a 52.9% share of the uptrend in inflation during the month.

One of the main drivers was electricity, which jumped to 1.6% in December from the 2.5% contraction in November and 7.8% decline a year ago.

In December, Manila Electric Co. (Meralco) raised the overall rate by P0.1048 per kilowatt-hour (kWh) to P11.9617 per kWh from P11.8569 in November.

The PSA also cited faster inflation in rentals at 2.4% from 2.2% a month ago and liquefied petroleum gas or LPG at 7.8% from 6.7%.

The PSA also cited transport as a main source of faster December inflation.

Transport inflation picked up to 0.9%, a reversal of the 1.2% drop in November and faster than the 0.4% clip a year earlier.

Mr. Mapa said the rise in transport inflation was due to the slower deceleration of prices of gasoline (-2.4% from -8%) and diesel (-2.9% from -9.4%).

In December, pump price adjustments stood at a net increase of P1.40 a liter for gasoline and P1.45 a liter for diesel, while kerosene prices had a net decrease of P0.80 a liter.

Passenger sea transport jumped to 71.9% in December from 17.1% in November. Mr. Mapa said this was due to seasonal factors amid the holidays.

RICE PRICES

Meanwhile, the heavily weighted food and nonalcoholic beverage index remained steady at 3.4% during the month. Food inflation was likewise steady at 3.5%.

“The good news is that the inflation rate of rice is easing. In fact, there’s even an expectation that inflation for rice will turn negative this January,” Mr. Mapa added.

Rice inflation slowed to 0.8% from 5.1% in November and 19.6% a year prior. Rice is typically the biggest contributor to overall inflation but has recently been on a downtrend since the government slashed tariffs on rice imports in July.

However, faster increases were recorded for vegetables, tubers, plantains, cooking bananas and pulses, which climbed to 14.2% from 5.9% a month ago.

Mr. Mapa said the price increase of tomatoes soared to 120.8% in December from 31.3% in November. It also accounted for 0.3 percentage point (ppt) of overall inflation.

The average price of tomatoes stood at P147.23 per kilo in December, rising from P84.64 per kilo year ago.

Mr. Mapa said higher vegetable prices could be partly attributed to storm damage in the past few months.

“That of course has an effect. It is not unique to this December, every time there’s a typhoon, it’s the prices of vegetables that really spike. Add to that the high demand (for vegetables) over the holidays,” he added.

Data from the PSA showed inflation for the bottom 30% of income households eased to 2.5% from 2.9% a month prior and 5% in the previous year. Year to date, inflation for the bottom 30% averaged 4.2%.

Inflation in the National Capital Region (NCR) accelerated to 3.1% in December from the 2.2% print in November and 3.5% a year ago. For 2024, inflation in NCR averaged 2.6%.

Outside NCR, consumer prices quickened to 2.9% from 2.6% a month earlier and 4% in the year prior, bringing the average to 3.4% in 2024.

“We are seeing the fruit of our efforts in bringing down inflation within the government’s target range of 2-4%,” BSP Governor Eli M. Remolona, Jr. said in a statement.

National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan said the full-year average inflation in 2024 is a “significant improvement” from 2023.

“Despite the risks we encountered throughout the year, our combined efforts to temper inflation have largely been successful. We will build upon this momentum as we commit to keep the inflation rate within our target range in 2025,” he added.

In a separate statement, the BSP said the latest inflation outturn is “consistent with the BSP’s assessment that inflation will remain anchored to the target range over the policy horizon.”

The BSP expects inflation to average 3.3% this year and 3.5% in 2026, both within the 2-4% target.

However, it said the balance of risks to the inflation outlook continues to lean to the upside, citing “potential upward adjustments in transport fares and electricity rates.”

“The impact of lower import tariffs on rice remains the main downside risk to inflation. Domestic demand is likely to remain firm but subdued. Private domestic spending is expected to be supported by easing inflation and improving labor market conditions,” the BSP said.

“However, downside risks in the external environment could materialize and temper economic activity and market sentiment,” it added.

Amid these risks, the BSP said “complacency is not an option.”

“Prices of certain commodities may rise due to supply-side factors like geopolitical tensions and adverse weather conditions,” it added.

WITHIN TARGET

Analysts still see inflation settling firmly within the 2-4% range.

“For now, we’re sticking to our below-consensus forecast for average annual inflation to fall further this year to 2.4% from 3.2% in 2024, though the risks to this projection are skewed to the upside,” Pantheon Macroeconomics Chief Emerging Asia Economist Miguel Chanco said.

Chinabank Research in a note said bad weather poses a risk to food prices amid the expected La Niña this quarter.

“Still, barring unexpected shocks, we project inflation will remain within target going forward,” it added.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said a “relatively benign” inflation print might still be seen up to early 2025, which would justify further policy easing.

Last year, the central bank delivered a total of 75 basis points (bps) worth of rate cuts, bringing the benchmark rate to 5.75% by yearend.

“Still, the BSP will likely continue to be vigilant of upside risks to prices. However, with inflation still expected to settle within target this year, we think the BSP has room to continue with its gradual pace of monetary policy easing,” Chinabank said.

It expects the BSP to deliver 75 bps of cuts this year to bring the policy rate to 5%.

The Monetary Board’s first policy review for the year is on Feb. 20.

Source: Business World