Cordillera reels from rising inflation

BAGUIO CITY, Benguet, Philippines — Residents in the Cordillera region may have to cut back on expenses to help tame the inflation rate that remains too high, especially for farmers and truckers who ferry salad vegetables to Manila each day, an official of the National Economic and Development Authority (Neda) said.

The rising inflation in the region has pushed up the cost of electricity and water, and caused increases in public transport fares, said Stephanie Christiansen, Neda assistant director for Cordillera, at an online economic briefing on Sept. 16.

The transportation sector recorded the highest inflation in this city and in several provinces in the Cordillera in August, data from the Philippine Statistics Authority (PSA) showed.

In Baguio alone, the transportation inflation rose from 17.1 percent in July to 20.7 percent in August. A rising inflation rate in this sector was also noted in the provinces of Apayao (32.2 percent to 33.2 percent), Kalinga (28 to 30.2), Ifugao (23 to 24.5), Abra (21.3 to 28.2) and Benguet (33.8 to 39.2).

Only Mountain Province reflected a lower inflation rate for transport, from 23.4 in July to 21.2 last month.

Inflation reflects the rise in the prices of goods and services in a given period and a decline in the consumers’ purchasing power.

Weak peso

As of August, the peso was worth 86 centavos in highland communities, reflecting a six-centavo value drop from 92 centavos for the same month in 2021, according to Aldrin Federico Bahit Jr., Cordillera chief statistical analyst of the PSA.

“So a basket of goods and services that could be bought for P100 in December 2018 is now worth P113.8 in August 2022,” he explained in the same briefing.

The weakened peso against the dollar may further accelerate inflation and raise the poverty threshold, said Bahit.

The inflation in the Cordillera in August technically “decelerated” with a 6.5-percent rate compared to 7.3 percent in July, he revealed.

But the lower value of inflation in August was not a reduction because the prices of goods and services were still high during the same month, he added.

Record-high

The region’s food inflation was at 5.1 percent in August, down from 6.5 percent in July, but still required “targeted measures toward food security and affordability,” Christiansen said.

The P332.8-million devastation wrought by the magnitude 7 earthquake on July 27 and this year’s past typhoons and future weather disturbances “may affect prices in the coming months,” she said.

Christiansen said Cordillera households have already seen their food expenses rise dramatically because that is where 42.4 percent of their income is spent.

The high transport costs “weigh heavily on the average household, which spends 5.7 percent of its total income on their cars or for the daily commute,” Christiansen said, adding that 25 percent or a quarter of a household’s income is allocated to paying utilities and cooking gas.

“Even if we observe a downward path [for Cordillera inflation], such numbers are record-high in this region,” said Christiansen.

She added: “The inflation we have been experiencing is a consequence of the [COVID-19] pandemic, with the lockdowns impacting on supply chains, shipping costs, and even productivity, therefore increasing the prices of commodities.”

The Cordillera economy is also reeling from the African Swine Fever and other infections that have affected hog production, the disasters brought on by the monsoon rains and the Abra earthquake, and the unstable price of fuel resulting from Russia’s invasion of Ukraine.

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