Philippines has Highest Inflation among 10 SEA Countries
Are you feeling the effects of inflation?
Regardless if you’re affected or not by rising inflation in the country, one thing is sure: data shows that the Philippines recorded the highest inflation rate among 10 Southeast Asian (SEA) countries in August 2018.
The Philippines’ inflation rate in August 2018 rose to 6.4% — way above the Bangko Sentral ng Pilipinas (BSP) target. For 2018, the BSP targets inflation to merely stay within the 2% to 4% range, and it looks like this target can no longer be achieved this year.
Brunei, Singapore, and Malaysia had less than 1% inflation
In contrast, Brunei, Singapore, and Malaysia had less than 1% inflation in August 2018. Inflation in Brunei is just 0.20% while Singapore’s inflation is 0.60% and Malaysia’s inflation is at 0.90%.
Here’s the official explanation on the cause of the 6.4% inflation rate, from the official BSP press release:
- Inflation went up as most Food items as well as Alcoholic Beverages and Tobacco recorded price increases.
- Rice inflation increased to 7.1% year-on-year due to tighter supply resulting from the ongoing lean season and adverse weather conditions.
- Recent typhoons also affected the supply of fruits and vegetables while Sugar prices rose as continuous rains dampened domestic output.
- Higher prices of Meat, Fish, and Seafood also pushed up inflation
- Non-food inflation eased to 4.1% from 4.2% in July as the upward adjustment in electricity rates due to higher generation charge was offset by the decline in inflation for education as a result of the free-tuition program of the government for the public tertiary level.
Is Rising Inflation Bad?
Inflation measures the rise in prices of goods and services in a country. Rising inflation is normal, as long as it is within the central bank’s target and the pace of increase is manageable.
But in the case of the Philippines, the August 2018 rate was clearly unplanned and unexpected by the BSP. It also was the fastest 1-year increase in inflation among 10 Southeast Asian countries — rising by 3.3 percentage points from 3.1% in September 2017 to 6.4% in August 2018.
In contrast, the inflation rates of Singapore, Malaysia, Cambodia, and Brunei even decreased compared to a year ago. For its part, however, the Philippine BSP promises to control inflation in the coming months by raising interest rates further.
This table compares the inflation rates of 10 SEA nations, as compiled by economic indicators website TradingEconomics.
|Rank||Country||July / Aug 2018 Inflation||Sept 2017 Inflation||1-Year Increase or Decrease|
Meanwhile, the infographic below highlights the inflation rates in the Top 10 countries with a lot of Overseas Filipino Workers (OFW). The data shows that inflation in these countries are still relatively low or stable.
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