The country’s inflation in January 2014 accelerated to its highest rate in two years, due to higher prices of food, non-alcoholic beverages, clothing and household furnishings.
The National Statistics Office (NSO) announced yesterday that the Philippines recorded an inflation rate of 4.2% last month, the highest since December 2011 when inflation also climbed to 4.2%.
Inflation is the percentage change in overall prices between two periods as measured by a price index. Simply put, a 4.2% inflation rate means that a product that used to be sold at P100.00 is now selling at P104.20. It is still the same product but is only more expensive now.
The January 2014 inflation is slightly higher than the inflation rate of 4.1% recorded in December 2013, but still within the expected inflation range of 3-5% set by the Bangko Sentral ng Pilipinas (BSP) this year.
The rise in prices was obvious in the Food and Non-Alcoholic Beverages sector, which rose 5.6% from a 4.9% in December last year. This may be due to higher demand in food and beverages brought about by the long Christmas holiday celebration in the Philippines.
Clothing and Footwear also increased prices in January, rising 3.4% from 3.1% in December. Prices of Household Furnishings and Equipment, meanwhile, slightly increased from 2.4% in December 2013 to 2.6% last month.
Although the 4.2% inflation rate is the highest in two years, it still pales in comparison to the 11.4% inflation recorded in 2008. At that time, that rate was the highest inflation in the Philippines in the past 14 years.
You can imagine the rise in commodity prices then: A product costing P100.00 would have risen in price to P111.40 in an instant.
A scary predicament, and that’s the silver lining with our high-but-fortunately-still-not-so-freakishly-high inflation rate of 4.2% in January 2014.
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