Philippine Inflation Rate

2020
Philippines
 Table A. Year-on-Year Inflation Rates

Area October September October Year-to-

2020 2020 2019 date
Philippines
Headline 2.5 2.3 0.8 2.5
Core 3.0 3.2 2.6 3.1
NCR
Headline 2.5 2.2 1.3 2.0
AONCR
Headline 2.5 2.4 0.7 2.7
 Figure 1. Headline Inflation Rates in the Philippines
3.5

2.5

1.5

0.5

0
Oct-19 Nov Dec Jan-20 Feb Mar Apr May Jun Jul Aug Sep Oct
•The increase in inflation of heavily weighted food
and non-alcoholic drinks to 2.1% during the
month, from 1.5% in September2020, was mainly
attributed to higher overall inflation.

•Similarly, annual mark-ups were higher at 1.2%

in the education index, and 2.4% in restaurants and
miscellaneous products and services.
•Food index inflation at the national level rose at a
faster rate of 2.1% during the month after five
consecutive months of deceleration. Food inflation
was estimated at 1.5% in September 2020, and fell
to -1.3% in October 2019.

•The higher inflation in the country's food index

was largely attributed to a 4.7% rise in meat index
inflation during the month, compared to 2.9% in
September 2020.
In the fish and oils and fats indexes, annual
increment rates were also higher at 3.7% and 2.5%,
respectively.
 Table B. Year-on-Year Rates in the Philippines
January 2016 – October 2020
Month 2016 2017 2018 2019 2020
January 0.7 2.5 3.4 4.4 2.9
February 0.5 3.1 3.8 3.8 2.6
March 0.6 3.1 4.3 3.3 2.5
April 0.7 3.2 4.5 3.0 2.2
May 0.9 2.5 4.6 3.2 2.1
June 1.3 2.5 5.2 2.7 2.5
July 1.3 2.4 5.7 2.4 2.7
August 1.3 2.6 6.4 1.7 2.4
September 1.7 3.0 6.7 0.9 2.3
October 1.8 3.1 6.7 0.8 2.5
November 2.1 3.0 6.0 1.3
December 2.2 2.9 5.1 2.5
Average 1.3 2.9 5.2 2.5
National Capital
Region (NCR)
 Table A. Year-on-Year Inflation Rates

Area October September October Year-to-

2020 2020 2019 date
Philippines
Headline 2.5 2.3 0.8 2.5
Core 3.0 3.2 2.6 3.1
NCR
Headline 2.5 2.2 1.3 2.0
AONCR
Headline 2.5 2.4 0.7 2.7
The 2.6% annual rise in the food and non-
alcoholic beverage index mainly forced NCR
inflation up. The higher annual rates of mark-ups
observed in the indices of lodging, water, energy,
gas and other fuels were also leading to the
upward trend at 0.7% and 1.6% for restaurants
and miscellaneous products and services.
 Areas Outside
NCR (AONCR)
 Table A. Year-on-Year Inflation Rates

Area October September October Year-to-

2020 2020 2019 date
Philippines
Headline 2.5 2.3 0.8 2.5
Core 3.0 3.2 2.6 3.1
NCR
Headline 2.5 2.2 1.3 2.0
AONCR
Headline 2.5 2.4 0.7 2.7
In the food and non-alcoholic beverage indexes,
annual rises were higher at 2.0%; education at 1.4%;
and restaurant and miscellaneous products and
services at 2.7%

Seven regions in AONCR reported higher inflation

during the month compared to their annual growth
rates in September 2020. In October 2020, region V
(Bicol region) still had the highest inflation of 4.1%,
while region VII (Central Visayas) had the lowest
inflation of 1.3%.
Causes of
Inflation
 Demand-Pull Inflation

The most prevalent cause of rising prices

is demand-pull inflation. This happens
when market demand for products and
services grows to such a degree that it
outstrips supply.
 Cost-Push Inflation

Cost-push inflation is when the cost of

production increases or the rate of supply
decrease. As long as demand stays the
same, either one would push up prices. In
labour, raw materials, and capital goods,
shortages or cost rises trigger cost-push
inflation.
Tools to Control
Inflation
Monetary policy. Higher interest rates are
reducing the economy's demand, contributing to
lower economic growth and inflation.

Control of Money Supply. Monetarists claim

that there is a strong correlation between the
supply of money and inflation, so inflation may
be regulated by regulating the supply of money.
Supply-side policies. These policies are intended to
improve the economy's productivity and efficiency,
placing downward pressure on long-term costs.

Fiscal Policy. Spending, demand and inflationary

pressure could be minimized by a higher rate of
income tax.

Wage controls. Trying to regulate wages can help

reduce inflationary pressures.