It’s official. September inflation just 0.9%

It’s now official. Inflation in September was barely 1 percent, the lowest in years.

Philippine Statistics Authority (PSA) data said September inflation was 0.9 percent, the lowest since the same rate was recorded in May 2016.

Headline inflation, based on consumer price index, was average of 2.8 percent in the first nine months of 2019, well within the government target of 2-4 percent.

Inflation hit a nine-year high of 6.7 percent in September 2018, due largely to increases in rice and food prices. The government responded with a lifting of rice import restrictions.

Claire Dennis S. Mapa, at a press conference, said costs of food and non-alcoholic beverages helped pull down inflation.

The rate of decline in rice prices was the highest since 1995, Mapa said.

She said retail prices of rice fell by 18 percent year-on-year as of September. Prices of palay, or unhusked rice, fell by a third.

In comparison, Mapa said rice prices jumped 10.4 percent in September 2018 then jumped further to 10.7 percent in October 2018, the peak of rice inflation.

Rice prices started to ease in May 2019.

The removal of restrictions in rice importation hiked supply and pushed prices down, Mapa said.

In a statement, Socioeconomic Planning Secretary Ernesto M. Pernia said the law that removed volume restrictions on rice imports in exchange for tariffs continued to play a key role in pulling down “overall inflation in the near term as it continues to improve rice stock inventory.”

Rice supply, he said, increased by 40.3 percent last August as a result of importation. Wholesale and retail prices fell 6-8 percent or P3 per kilogram, he added.

Pernia, who heads the National Economic and Development Authority, acknowledged the adverse impact of the law, Republic Act No. 11203, on Filipino farmers.

“We must at the same time protect the Filipino farmer from falling palay prices,” he said. He said the government must fast track and give priority to programs and projects listed for financing by the Rice Competitiveness Enhancement Fund, which gets a P10 billion yearly allotment from rice tariffs.

Other food items also posted lower prices in September. Vegetable prices fell 4.7 percent; corn, 4.1 percent; sugar, jam, honey, chocolate and confectionery, 4.1 percent.

Although fish prices increased, it was only by 1.4 percent from 2.8 percent in August. Prices of oils and fats rose 1.2 percent, lower than August’s 1.8 percent.

Inflation in meat products slowed to 2.4 percent and that has yet to take into account the effects of African swine fever (ASF) on pork prices, Mapa said.

Pernia said “we are also on the lookout” for increases in prices of pork as a result of ASF and also prices of oil following the attack on Saudi Arabia’s oil refinery recently.

PSA data, however, showed the opposite happening in oil prices. Petroleum and fuels for personal transport equipment cost lower by 8.1 percent in September./TSB