The Philippines’ inflation rate further slowed to 0.9 percent in September 2019, the lowest since the 1.3 percent in June 2016, due to faster deceleration of the heavily-weighted food and non-alcoholic beverages index.
This is a drop from 1.7 percent last August and is lower than the 6.7 percent a year ago, the peak last year, which brought the average inflation in the first nine months this year to 2.8 percent.
Philippines Statistics Authority Undersecretary Claire Dennis S. Mapa said rice inflation posted a -8.9 percent inflation; corn, -4.1 percent; vegetables, -4.7 percent; and sugar, jam, honey, chocolate, and confectionery, -4.1 percent.
Mapa said the latest rice inflation is lowest since 1991, with monthly price monitoring data showing an 18 percent drop year-on-year on retail price, which authorities traced to the rice tariffication law.
Mapa forecasts inflation to sustain its drop towards the end of the year. “Our expectation is that it will go downward unless there are shocks,” he added.
The lowest inflation rate in three years gives the Bangko Sentral room to ease monetary policy if needed. It was below the 1.1 percent forecast in a Reuters poll and was within the Bangko Sentral’s 0.6 to 1.4 percent forecast for the month.
It was also well inside the Bangko Sentral’s two to four percent target for the year.
Inflation peaked at a near-decade high of 6.7 percent in September and October last year. Overall prices have since eased, allowing the Bangko Sentral to start reversing some of last year’s 175-basis points’ worth of interest rate increases. (PNA and Reuters)
