Iloilo City’s inflation rises by 9 pct within one year

By Joseph B.A. Marzan

Iloilo City’s inflation rate as of November 2022 was indicated to have risen to 12.4 percent according to the Philippine Statistics Authority’s (PSA) recent data, noting a sharp and consistent rise when compared to the past 12 months.

Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country. But it can also be more narrowly calculated—for certain goods, such as food, or for services, such as a haircut, for example. Whatever the context, inflation represents how much more expensive the relevant set of goods and/or services has become over a certain period, most commonly a year. (IMF)

During a forum on inflation hosted by the Iloilo City Government last Friday, PSA-Region 6 officer-in-charge Nelida Amolar presented inflation trends in the region and in the city.

The November 2022 inflation rate for Iloilo City was 1.1 percent higher than the October rate (11.3 percent) and 9.1 percent higher than that of November 2021 (3.3 percent), based on the Retail Price Survey for the Generation of Consumer Price Index (CPI).

Inflation rate dips for this year were only recorded in February and September, with 3.0 percent and 7.3 percent, respectively, when compared to the rates from their preceding months (4.2 percent in January and 9.7 percent in August), but rates then rose in between and after these months.

The highest rate was recorded in November in Housing, Water, Electricity, Gas, and Other Fuels commodity group (20.3 percent), against 18.5 percent in October.

The following commodity groups also experienced inflation rate increases between October and November:

–          Furnishings, Household Equipment, and Routine Maintenance (12.9 percent from 9.8 percent);

–          Food and Non-Alcoholic Beverages (10.5 percent from 8.5 percent);

–          Recreation, Sport, and Culture (2.8 percent from 1.8 percent);

–          Clothing and Footwear (1.3 percent from 1.0 percent); and

–          Health (0.3 percent from 0.2 percent).

Three commodity groups saw decreased rates – Transport (30.7 percent from 32.0 percent), Personal Care and Miscellaneous Goods and Services (3.4 percent from 3.9 percent), and Alcoholic Beverages and Tobacco (8.3 percent from 8.5 percent).

Some groups remained with the same rate between October and November, including Information and Communication (-0.4 percent), Education Services (1.1 percent), Restaurant and Accommodation Services (1.3 percent), and Financial Services (0.0 percent).

In the same forum, National Economic and Development Authority-Region 6 (NEDA-6) officer-in-charge Arecio Casing noted that Iloilo City also currently has the highest inflation rate in the region.

It is followed by Negros Occidental (11.1 percent), Antique (9.3 percent), Iloilo province (8.8 percent), Bacolod City (8.7 percent), Guimaras (8.3 percent), Capiz (7.7 percent), and Aklan (7.5 percent).

Casing pointed the rising inflation to price pressure from elevated global commodity prices and a tight domestic food supply, citing the World Bank’s Philippines Economic Update.

The PSA reported earlier this month that the inflation rate in Western Visayas in November 2022 was at 9.6 percent, which is a 1.6 percent jump from the October 2022 rate (8.0 percent), and a 4.9 percent jump from the November 2021 rate (4.7 percent).

Inflation rate is defined by the PSA as the annual rate of change or the year-on-year change in the CPI, which is the indicator of the average retail prices of a fixed basket of goods and services commonly purchased by an average Filipino household relative to base year.

The CPI compares the current cost of certain goods and services with their cost at an earlier time, with the base index of 100 from the current base year used being that of 2018.

Computing for the inflation rate is done by subtracting the difference between the most recent CPI and the CPI from the same month last year, then dividing the difference by the latter CPI, and multiplying the quotient by 100 to get the rate.

This means that with the November 2022 CPI of the region being 121, the prices of goods and services have increased by 21 percent from the base year of 2018. It also means that for goods and services that cost P100 in 2018, consumers now need an additional P21 for the same goods and services.

The current average CPI in the region is at 115.8 as of last month, meaning that there has been an average price increase of 15.8 percent compared to the base value in 2018.

WHAT CAN BE DONE?

Casing reiterated the World Bank report, which recommended expanding social support programs, targeted social assistance measures, and effective public spending in the agriculture sector to address low agricultural productivity as well as the challenge of food security.

As to local government units (LGUs), he said that their recommendations include:

–          Activation of Local Price Monitoring Board to monitor the markets and areas of retail;

–          Continuation of the Department of Agriculture’s KADIWA and supporting Department of Trade and Industry’s Go Lokal programs;

–          Implementation of Community-Based Monitoring System (CBMS) for LGUs to identify vulnerable sectors of their areas including the barangay and sitio and purok levels;

–          Investments in Food Security Programs; and

–          Local Energy Generation in cities or towns with present or potential for solar or renewable energy facilities.

Ilonggo economist and University of Asia and the Pacific President Winston Padojinog likewise recommended supply-side interventions, including dealing with structural issues and policy neglect and overcoming cultural bias.

Structural and policy concerns may be addressed, according to Padojinog, by promoting land consolidation to achieve scale economies, organizing and connecting farmers to market price information and access to retail markets, capitalizing on the Jalaur River Multipurpose Project II for agribusiness, and diversifying to and processing high-value crops and vegetables.

Overcoming cultural bias includes promotion of agricultural entrepreneurship and other re-skilling, upskilling, and retooling of technical-vocational trainings, and encouraging young entrepreneurs to venture into agribusiness.

“If we just talk about farmers, they won’t be able to make it [in agribusiness]. What we need are ‘agri-preneurs’, especially the young ones. We can encourage them to go back and see the bright prospects of agriculture and venture into agribusiness,” Padojinog stated.