Inflation for the first month of the year slowed down to 2.8 percent, the lowest since October 2020 even as rice prices are expected to increase up to July.

Rice inflation accelerated to 22.6 percent in January from 19.6 percent in the previous month, the Philippine Statistics Authority (PSA) said Tuesday.

"Rice inflation at the national level in January 2024 is at 22.6 percent and this is the highest since March of 2009 when the rice inflation was recorded at 22.9 percent," said PSA Undersecretary Dennis Mapa.

"Rice contributed 1.3 percentage points out of the 2.8 (percent). For our inflation for the bottom 30 percent income household which was recorded at 3.6 (percent), the rice inflation contributed close to 3 percentage points for the overall inflation because it has a big weight on the inflation basket," he added.

Mapa said rice inflation is expected to continue to go up until July this year.

"If this price will continue to be like this because we have (low) base, we expect that we will have rice inflation in the vicinity of 20 percent or higher until July," he said.

According to the PSA, the most significant contributor to the lower inflation rate is the easing of food inflation to 3.3 percent from last month's 5.5 percent due to the decrease in the prices of corn (-4.3 percent from -3.5 percent), oils and fats (-4.3 percent from -3.6 percent), meat (-0.7 percent from 0.2 percent), and sugar (-1.0 percent from 0.1).

Mapa noted that January's 2.8 percent inflation is the lowest recorded since 2.3 percent last October 2020.

"For the food inflation last month was 3.3 percent, that's for the food and non-alcoholic beverages and this is the lowest since March of 2022, actually the food inflation during that time was 2.8 percent," he said.

Mapa said based on their monitoring of the price of "regular milled average for Philippines this January 2024, is at P 49.65 per kilo, in January 2023 it was at P39.60 per kilo that's why it has a year on year increase of 25.4 percent. By December 2023 it was at P 48.48 so it increased to 2.4 percent."

"For well milled rice... the average price per kilo this January 2024 is around P 54.91, in January 2023 it was at P 43.92 so it was like 11 pesos increase per kilo so the year on year is about 25 percent. In December 2023 it has an average of P 52.82 so it has a month on month increase of 2 percent," he said.

"For special rice in January 2024 it had an average of P 63.90, for January 2023 it was at P 53.76, there was around 10 pesos increase. So year-on-year inflation for special rice is about 18.9 percent. In December 2023 it had an average of P63.08 so there is a month on month increase of around 1.3 percent," he added. Robina Asido/DMS