Inflation in the Philippines increased to 2.5% in November 2024, up from 2.3% in October, according to The Philippine Statistics Authority (PSA). Recent typhoons significantly impacted agriculture, driving higher food prices and contributing to the rise in inflation.
Typhoons Drive Surge in Food Prices
Increased prices for agricultural products and food primarily drove the rise in inflation in November.
Severe typhoons impacted the country’s agriculture sector, leading to a surge in the prices of vegetables, fruits, and meat. The Philippines faces typhoons annually, and natural disasters play a substantial role in driving inflation.
Central bank signals suspension of interest rate cuts
Central Bank of the Philippines (BSP) Governor Eli Remolona announced a possible pause in interest rate cuts at the December 19 meeting.
Since the beginning of this year, the central bank has reduced interest rates by a total of 50 basis points, bringing the current policy rate to 6%.
The Governor attributed the recent increase in inflation to temporary factors and adopted a cautious approach to monetary policy.
Inflation in the Philippines target within reach
The Philippine Government and Central Bank have established an inflation target of 2-4% for 2024, and the current rate of 2.5% is within this target range.
The perspectives of citizens and their influence on daily life
The rise in inflation has directly affected the daily lives of citizens.
The rising cost of food is the main factor straining household budgets. As a result, some consumers express concern that the prices of vegetables and fruits have become too high to afford.
Is the inflation in the Philippines increase temporary?
In November, inflation in the Philippines rose primarily due to higher food prices; nevertheless, it remained within the central bank’s target range. Once temporary factors, such as typhoons, are addressed, inflation is expected to stabilize again. In the coming months, the focus will be on the central bank’s response and market developments.
