A distinctive low inflation rate this year

Inflation is again very much in the news this year – as it was last year – but with a big difference. This October, according to the Philippine Statistics Authority (PSA), the inflation rate, referring to the rise in the prices of goods in the market, was 0.8 percent. It is the lowest rate increase in almost three years.

Last year was a truly difficult one for most people, as prices began to rise in February, 2018, blamed by the government on rising global oil prices. But the new taxes of TRAIN 1, including a ₱2 tariff per liter of imported diesel, were also beginning to be charged. The combination – plus market price manipulations – started pushing up market prices.

By June, the inflation rate had risen to 5.2 percent. By July, it was 5.7 percent. It reached a peak of 6.7 percent in September, a 10-year record.

A rice tariffication law which removed all quantitative restrictions on rice importations flooded the country with imported rice – the principal element in the Filipino diet – and the inflation rate subsided.

That was in 2018. This year, 2019, market prices have been down and steady. The index for food and non-alcoholic beverages is down to 0.9 percent from 2018. The transport index is down to 1.7 percent. The index for housing, water, electricity, and other fuel is down to 0.6 percent. The index for furnishings and household equipment and maintenance is down to 2.7 percent. Health, restaurant, and miscellaneous goods and services are down to 2.9 percent.

Higher inflation rates were noted in alcoholic drinks and tobacco – 16.5 percent – but this was expected considering the increased taxes imposed on these vices.

But the total inflation rate is what matters – 0.8 percent in October, 2019. To think that in October, 2018, it was 6.7 percent.

We have had other problems in the country this year – water shortages, increases in polio, measles, and dengue cases due to a nationwide drop in vaccination, and most recently, earthquakes in Mindanao. But not last year’s widespread problem of inflation – high market prices.

As we move on towards Christmas in December, there may be some price increases as the holiday demand rises, but we must be grateful that this year has been good for consumers, and that includes all of us.