INFLATION ACCELERATES IN DEC 2019 | Marvin Germo
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INFLATION ACCELERATES IN DEC 2019

By: Marvin Germo | December 31, 2019

Inflation Is Quickening

This December, the rate of inflation seems to quicken. The government sees the increase in electricity rates, oil prices, and prices of commodities due to the disturbance in weather as leading factors that cause the acceleration of inflation. The BSP’s projection this month is at 1.9-2.6% ranges and compared to November, which was at 1.3%, this is higher. If we try to go back in the previous year, the range is still lower than the5.1% headline inflation recorded in the last month of 2018. It’s the end of the year already. Let’s hope that the rate will still fall on the expected percentages.

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Reasons For Higher Inflation Rate

It was disclosed by the BSP that there are numerous factors affecting the rising inflation rate. Included in this is the increasing price of electricity, water and oil. Earlier in December, Manila Electric Co. (Meralco) has given its statement that consumers should expect an increase in their bills this month-end because of the higher price in the spot market. Meralco said that the generation charge remained at P5.1967 per kilowatt-hour in December and this is higher by P0.1650 per kWh if we take a look at the November rate. Supported by this information, consumers should see additional P0.3044 per kWh in their electric bills. Moreover, those who are consuming electricity at 200 KhW should expect an additional P9.8623 per kWh this month. About P61 pesos rise will be seen.

About Commodities and Rice

The rise in the price of commodities is only one variable that affects inflation in December. The recent typhoons triggered food and water to rise in price. But, there’s a catch. The continued easing of domestic rice prices can temper rising inflation. The Rice Tariffication Law (TRL) or known as the Republic Act 11203 that bans quotas on rice imports helped a lot in the decline. Today, what we can see is that this republic act is the only possible way we can moderate inflation. 2020 will still remain intact if this continues to happen.

Inflation In November

Last November, the inflation stood at 2.5% as an average for the first 11 months of the year. This is still in the expected range of the government from the 2-4% target for 2019. Moving forward, BSP and the rest of the government will still watch out for the moving price trends and make sure that the monetary policy stance is appropriate to maintain price stability.

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