Philippines: April inflation down to 6.6%, but…

The Philippine Statistics Authority (PSA) [link] provided consumer price index (CPI) data for April and revealed that headline inflation had fallen to 6.6% from March’s 7.6% and February’s 8.6%.

Core inflation, which excludes certain food and energy items, was only down slightly to 7.9% from March’s 8.0%.

All of the analysts surveyed by BusinessWorld had predicted April’s CPI to be much higher. The median prediction was 7.0%, and the lowest prediction on the chart was 6.7%.

The quarter-on-quarter change is not nearly as significant, however, with April’s CPI down just 0.2% from its March level, and down just 0.4% from the “red hot” high that was posted back in January.


It’s easy to forget that inflation, as we talk about it, is just a rate of change.

So when we say that April 2023 inflation was “just” 6.6%, what we’re really saying is that the price of the basket of goods that we look at when we calculate CPI increased by 6.6% relative to that overall price that we measured a year ago, back in April 2022.

If that previous price was already elevated by inflation, as is the case here, the year-on-year change is going to be lower, but that “lower” result is going to hide two crucial bits of information: (1) the prices of goods, overall, are only going up, and are still going up at a rate that is alarmingly high, and (2) the quarter-on-quarter change in the CPI is basically negligible.

We are within a half percentage point, in terms of CPI value, from where we were in January.

This “paper” improvement of the inflation rate is going to get even worse as we move through the year, as the rate of inflation increased steadily from around 4% in March of 2022 to over 8% by December of yesteryear.

It will be a “victory” for the BSP and the administration to guide inflation back down into its target range of 2 to 4%, but it’s important to remember that that “victory” will not come with a return to what things were like before.