Inflation in 2022

In the year 2022, the Philippines issued the nation with the highest inflation rate among
ASEAN members, which faced a high inflation rate of 5.8 percent, which exceeded the government’s
goal of 2.0 to 4.0 percent. The main factors that caused this were the global oil price hike, the supply
chain disruptions, and the weakening of the peso. In the provided article, we can see that the Philippines
had a lower average inflation rate than the world average in 2022, but it also exceeded its own target
range and faced a rapid acceleration of inflation in the last month of the year. While the NCR had a
higher average inflation rate than AONCR, but both had similar inflation rates in December 2022. The
regions that had the highest inflation rates were mostly located in Luzon and Visayas, while the regions
that had the lowest inflation rates were mostly located in Mindanao. The high inflation rate harmed the
economy and the living conditions of poor households. Therefore, we need to read the article about
inflation 2022 at a glance to learn about the reasons, consequences, and policy actions of inflation in the
Philippines. This article will give an overview of the key points and implications of the article, as well as
some critical analysis and evaluation of its claims and evidence.

There is a need for a comparison of the target range for the past years to study how fast inflation increases
in a span of one year. In this study, the Banko Central's initial target range for 2022 is 2.0 to 4.0 since the
inflation rate for this year reached 5.8 percent, 3.9 percent higher than the inflation in 2021. This rapid
acceleration of inflation resulted in an adjustment of three times the inflation forecast. From 5. 0 percent
in February 2022, 5.4 percent in May 2022, 5.8 percent in November 2022, and lastly, 8.1 percent in
December 2022, which is considered the highest rate since November 2008. This inflationary pressure
resulted in an increase in the prices of commodities and a depreciation of the peso's value for a reason that
we couldn't keep up with the target inflation rate of 2.0 to 4.0; thus, core inflation began to rise in the
second half of the year as buyers became used to the higher prices of commodities.

Food prices has accounted the third of the overall inflation in 2022 that has contributed 2.1 percent to the
5.8 percent headline, including the most commonly bought food products such as cereals, rice, corn, and
the basic necessities. The price of meat increased followed by the price of gas due to decrease of supply
also the vegetable prices surged upwards, particularly in the 4th quarter of the year 2022. This increase in
prices is naturally because of the natural calamities. For onions, the price increased by 69 percent. From a
price of Php 180, it becomes Php 305.76 due to insufficient supply and lack of importation.

The half of overall inflation is from non-food index (CPI), such as increase housing (rental) and utilities
(electricity rate), with overall inflation of 3.4 percent due to the increase in the price of oil, align to this
there is a petition to also increase the minimum fair from 9php to 10php in 2022 and continuously
increase in October to 12php. As a result, the wages of Filipino workers also increased.The inflation rate
for lower-income households increased to 5.3 percent from 4.8 percent in 2021. This is due to poverty
resulting to the larger share of food and nonfood items that has been a challenge/goal to the government
to lessen the poverty.
Hence, Philippines became more used to the inflation. It was posted that the Philippines has the highest
inflation rate among ASEAN economies, and because of lockdown in 2021, global inflation hit 8.8
percent in 2022. The inflation outlook for 2023 is to ease the rapidly increasing inflation rate. As for
remedies or recommendations, DBCC will consider the 2.5 to 4.5 percent range before returning to the
2.0–4.0 range in 2024. For BSP Gov. Filipe, the current hike cycle must be paused by the second half of
2023 once inflation has calmed down and the value of the peso is stabilized.

Inflation is not new to us reason why we still feel the effect of it. The country side posted that the
Philippines has the highest inflation rate among ASEAN economies the highest among 6 ASEAN country
and because of pandemic lockdown global has been recorded of 8.8 percent of inflation in 2022 inn
overall as the result of increase in price of all product, that’s why the IMF warned that 2023 is going to be
tough year experiencing weakening growth.

As the inflation continuous to become our biggest downside in economic growth for 2023 momentary
authorities manage it through interest rate. High interest to spend less and to save more this could help to
lessen the demand of goods and services resulting to downward pressure on prices. However, it has also
negative effect in investment, slow the growth of consumption and a higher cost of borrowing.

In 2022, inflation was a complicated and dynamic phenomenon that caused critical problems and threats
to leaders and consumers. It was impacted by many different kinds of factors that differed between
countries and areas. Therefore, it required careful monitoring and analysis to formulate appropriate and
timely policy responses. Because of the 2022 inflation government should adjust the interest rates of
central banks to influence inflation. Governments can control inflation through the adoption of fiscal
policies, such as cutting expenditure or raising taxes. These actions lower the economy's overall demand,
which aids in managing price increases.