THE Philippine Statistics Authority (PSA) reported Tuesday that the inflation rate in December 2024 rose to 2.9%, up from 2.5% in November.
National Statistician and PSA chief Undersecretary Claire Dennis Mapa attributed the increase to price hikes in electricity, housing rentals, and LPG (liquefied petroleum gas), which accounted for 56.2% of the inflation uptick. Meanwhile, rising transportation costs—including gasoline, diesel, and passenger transport by sea—contributed 46.9% to the inflation increase.
Key Drivers of Inflation
Passenger transport by sea saw a sharp inflation jump, rising from 17.1% in November to 71.9% in December, which Mapa described as a seasonal trend during the holiday travel period. LPG prices also surged with an inflation rate of 7.8%.
Rental inflation edged higher at 2.4%, up from 2.2% in November, reflecting changes in rental contracts for properties such as studio apartments, one-bedroom, and two-bedroom units.
However, there was some good news: the inflation rate for rice, a staple food in the Philippines, fell to 0.8%, the lowest level since January 2022.
Food Prices
Food and non-alcoholic beverages recorded a higher inflation rate of 3.4%, driven by steep price increases in specific items. For example, inflation for vegetables, particularly tomatoes, reached 14.2%, while meat, particularly chicken, experienced a 4.9% inflation rate, exceeding the overall inflation rate of 2.9%.
Annual Inflation Rate Improves
Despite December’s inflation increase, the country’s annual average inflation rate for 2024 dropped to 3.2%, well within the government’s target range of 2% to 4%. This marked a significant improvement from the 6% average inflation rate recorded in 2023.
Mapa explained that the lower annual average inflation was largely due to declining inflation rates for food and non-alcoholic beverages, which decreased to 4.4% in 2024 from 7.9% in 2023.
Government Response
National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan described the improvement as a positive outcome of the government’s efforts to curb inflation.
“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 keeping the inflation rate within our target range in 2025,” Balisacan said in a statement.
As the government continues its initiatives, maintaining price stability remains a top priority heading into 2025.