MANILA—The increase in consumer prices accelerated in September but stayed well below target for the year, cementing claims the Philippines continued to be on the sweet spot of fast economic growth and benign inflation.
The National Statistics Office reported Friday that the annual inflation rate settled at 2.7 percent in September, faster than the four-year low of 2.1 percent registered in August.
The latest figure, however, was still below the official target for the year, which was a range of 3 to 5 percent. It was also slower than the 3.7 percent posted in September last year.
The average inflation rate for the first 10 months of the year was 2.8 percent, the NSO said.
The Bangko Sentral ng Pilipinas earlier predicted that inflation for September would settle anywhere between 1.9 and 2.8 percent.
Data from the NSO showed the following commodity groups registered faster annual inflation rate in September than in August: food and non-alcoholic beverages, from 1.8 to 2.5 percent; alcoholic beverages and tobacco, from 31 to 31.2 percent; housing, water, electricity, gas and other fuels, from -0.3 to 1.1 percent; and health, from 2.6 to 2.7 percent.
Inflation for food alone accelerated from 1.8 to 2.5 percent.
Arsenio Balisacan, director general of the National Economic and Development Authority, has said price pressures from the external front, including volatile prices of oil in the world market, had little impact on domestic inflation.
He said any uptick in prices was unlikely to cause a breaching of the inflation target given that the year-to-date figure remained below the low end of the target.
Balisacan said any mild depreciation of the peso would not cause inflation to go beyond the target.
The benign inflation thus far in the year attributed to favorable supply conditions in the country.
Officials said the recent phenomenon of rising investments from local enterprises, particularly those belonging the manufacturing sector, was helping increase the economy’s production capacity.
As such, they said, the impact of rising demand for goods and services was being muted by increasing supply.
They said that unlike previous years when economic growth was driven mainly by consumption, investments have been increasing their contribution to the economy’s expansion.
The Philippine economy grew by 7.6 percent in the first semester from a year ago, the fastest expansion rate in Asia for the period. The growth rate was the same as China’s.