As food prices remained elevated, inflation likely hit 6.4 percent in September, similar to the over nine-year high rate posted in August, the Department of Finance (DOF) said Friday.
In an economic bulletin, DOF Undersecretary and chief economist Gil S. Beltran nonetheless said month-on-month inflation in September slowed to 0.6 percent from August’s 0.9 percent.
This meant that the price increases in September were lower compared to prices a month ago.
But the rate of increase in prices of food and nonalcoholic beverages in September was faster, at 9.3 percent year-on-year, compared with the 8.5 percent in August.
Food and nonalcoholic beverages accounted for the biggest share of the DOF’s 6.4-percent headline inflation forecast for September, at 3.7 percentage points.
Last August, food and non-alcoholic beverages accounted for a lower 3.4 percentage points of the headline inflation rate.
In terms of year-on-year increase, the largest jump was in tobacco prices, at 29.6 percent, followed by operation of personal transport (up 21.3 percent), vegetables (19.4 percent), fish (12.3 percent), non-alcoholic beverages (11.9 percent), and rice (10 percent).
“Price increases in food items are the main drivers of inflation. The decline in power rates, however, moderated the inflationary pressure from non-food items,” Beltran noted.
The price increases of non-food items slowed to 3.7 percent year-on-year in September from 4.2 percent last August.
For Beltran, “strong Bangko Sentral ng Pilipinas (BSP) monetary action backed by two successive 50-basis point policy rate hikes and the President’s support to administrative measures proposed by the Economic Development Cluster to remove nontariff barriers on major food items will moderate food inflation in the short run.”
Last Thursday’s rate hike was the most aggressive monetary policy tightening streak by the BSP since the crisis-ridden Joseph Estrada presidency.
“Policy reforms including rice tariffication and budget support for agricultural productivity programs will stem similar inflation episodes in the future,” Beltran added.