MANILA, Philippines–The rate of consumer price increases slowed down in September on the back of tempered increases in the prices of basic goods and utilities, official data released on Wednesday showed.
Last month’s inflation figure, at 4.4 percent, was lower than the 4.9 percent posted last August, the Philippine Statistics Authority (PSA) said.
“Moderate food inflation, lower electricity charges and the rollback in global and local petroleum prices contributed to the slower overall inflation in this [September 2014] period,” according to Emmanuel F. Esguerra, deputy director general of the National Economic and Development Authority (Neda).
Esguerra said full-year inflation was expected to remain within the target range. “Notwithstanding upward pressures on prices, the general market inflation expectations remain well-anchored, as policies remain supportive of manageable inflation rate.”
Food price inflation slowed to 7.4 percent last month from 8.3 percent in August. Price increases in corn slid to 8.3 percent in September from 9.1 percent in the previous month; in rice, down to 10.7 percent from 13.2 percent; and in vegetables, a lower 9.8 percent from 15 percent.
Monetary authorities are now more confident that price increases would be kept in check as inflation for September eased from elevated levels, with the cost of food staying more stable in the month.
Even so, the Bangko Sentral ng Pilipinas (BSP) said it remained wary of risks which could push inflation back up in the coming months of the year. These included monetary policy adjustments in advanced economies, which could upset investment flows globally.
Geopolitical tensions in the Middle East and other parts of the world may also affect commodity prices locally.
Average inflation since the start of the year still remained above the midpoint of the central bank’s target range of 3 to 5 percent, although the BSP said September’s level gave “more confidence that the full-year average would be in target.”
“We now believe inflation is no longer at risk of breaching the top end of the central bank’s target range for 2014,” Barclays analyst Rahul Bajoria said in a note to investors after the data were released.
Bajoria said the BSP’s recent moves to keep prices in check might be enough for now, with further adjustments in policy settings likely to be shelved until the middle of next year.
Originally posted at 4:20 pm | Wednesday, October 8, 2014