DOF sees September inflation at 5-month high of 3.4%

Inflation likely rose to a five-month high of 3.4 percent year-on-year in September on higher food and fuel prices, the Department of Finance’s (DOF) chief economist said.

Finance Undersecretary Gil S. Beltran’s headline inflation forecast for last month was faster than the 3.1 percent posted in August as well as 2.3 percent in September last year.

The government will release the September inflation data on Thursday.

At 3.4 percent, the rate of increase in prices of basic goods would be the fastest in five months, matching the 3.4 percent recorded in March and April.

In an economic bulletin, Beltran attributed his higher inflation projection for September to price adjustments in both food and non-food commodities.

“Weather disturbances caused price increases in food items, especially vegetables,” Beltran noted.

Typhoons “Kiko,” “Lannie,” “Maring” and “Nando” hit the country last month.

Also, “fuel price hikes and power rate increases contributed the increase in the non-food commodity group,” Beltran added.

In general, “the apparent acceleration in the general price level is largely due to base effects, boosted by fuel prices,” Beltran explained, noting that the average prices of electricity, gas and other fuels declined by 1.5 percent in September last year.

Even as inflation would have had peaked last month, Beltran pointed out that it was “still within manageable levels, just slightly above the midpoint of this year’s target range.”

As of August, headline inflation averaged 3.1 percent, within the government’s 2-4 percent target for 2017. /jpv