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MANILA, Philippines — The country’s forecast headline inflation for September may further decrease to 2.5 percent, continuing its downward trend, Finance Secretary Ralph Recto said in a Palace briefing on Tuesday.
“For September our expectation is roughly 2.5. It’s a range between 2.5 to 2.9, the midpoint is roughly 2.5,” Recto said, speaking partly in Filipino.
READ: Philippine inflation eased to 3.3% in August
Recto attributed this potential further decrease to the reduction in rice tariff rates, which he said would bring down rice prices.
However, Recto admitted that certain challenges may pose a problem in achieving a lower inflation rate, particularly a war in the Middle East and global oil prices.
“But since in September, you only have what? — a week to go. So I think we’re on track with regard to the inflation target for September. But our biggest challenge really is external headwinds — the war in the Middle East, which we don’t want that to go out of hand, and possibly oil price increases which we have no control over,” he said.
The rise of electricity rates also contributes pressure to inflation, but Recto said the decision of President Ferdinand Marcos Jr. to spread out the hike in power rates to around 36 months would alleviate its effects.
“So, I think everything is manageable,” he said.
Slight rise expected in 4th quarter
Meanwhile, come October or the fourth quarter of the year, Recto said the headline inflation may increase to around 3.1 to 3.9 percent.
“Normally, that’s seasonal. Every fourth quarter it slightly increases. But like I said, we expect it to be within the target range of the BSP [Bangko Sentral ng Pilipinas] – of anywhere between 2 to 4 percent,” Recto said.
“So, for the full year, we’re looking at the total inflation rate to be about 3.4 percent more or less.”
For 2025, Recto then said the inflation was expected to decrease to 2.9 to 3.1 percent.