TYPHOON YOLANDA PROPELS INFLATION TO 2-YEAR HIGH IN DEC.

MANILA—Typhoon Yolanda’s devastation and power hikes raised prices of basic commodities, pushing headline inflation to 4.1 percent in December 2013, according to the National Economic and Development Authority (NEDA).  

“Almost all food items in the average consumer basket increased, which can be mainly attributed to the impact of Typhoon Yolanda (Haiyan) that hit the central Philippines in November 2013,” said Economic Planning Secretary Arsenio M. Balisacan.

Food prices went up by 5.0 percent in December 2013 from 4.0 percent in the previous month. This was due to price increases of rice (9.2% from 8.1%), vegetables (9.8% from 5.4%), meat (2.3% from 2.2%), fish (3.3% from 3.1%), and fruits (4.3% from 3.9%), among others.

“Some food items even reached double-digit inflation in the areas hardest hit by the typhoon,” he added.

In Eastern Visayas  (Region VIII),  prices of vegetables went up by 11.3 percent in December 2013 from 5.8 percent of November 2013. While in Central Visayas (Region VII), prices of rice increased by 12.2 percent from 9.4 percent, 11.2 percent from 7.8 percent  for fruits, and 11.3 percent from 6.6 percent for vegetables.

Also, in Western Visayas (Region VI), vegetable prices surged by 11.8 percent from 2.3 percent in November 2013.

“This is the highest inflation recorded since December 2011,” Balisacan said, who is also NEDA Director-General.

However, full-year 2013’s inflation averaged at 3.0 percent, at the low-end of the Development Budget Coordination Committee (DBCC)’s inflation target of 3.0 to 5.0 percent for the year.

“Moreover, relative to the previous months, food prices are usually higher in December due to the festive season.,” the Cabinet official said.

Also, power hikes contributed significantly to the acceleration of overall inflation in December 2013. 

The Manila Electric Company’s (Meralco) generation charge significantly rose by 40 percent, or PhP2.19/kWh, year-on-year in December 2013 due to the scheduled and unscheduled power outages in major power plants. However, the power distributor deferred to further implement the electricity rate increase following a 60-day temporary restraining order (TRO) issued by the Supreme Court.

Furthermore, domestic prices of petroleum products rose as world oil prices jumped (1.4% year-on-year from -1.2% in November for Dubai crude oil).

“This is while the peso depreciated further by 7.6 percent in December 2013 from 5.9 percent in the previous month,” said Balisacan.

Overall, among the Association of Southeast Asian Nations (ASEAN)-5 countries, headline inflation in December 2013 picked up in the Philippines and Indonesia, except for Thailand.