Sept. inflation eases to 4.8% 

Despite expectations of an elevated inflation rate for the month of September, latest print for such proved to ease from the month-ago figure.

Data from the Philippine Statistics Authority (PSA) showed inflation during the month stood at 4.8 percent, a slight deceleration from the 4.9 percent in August.

Nevertheless, the latest inflation print proved to be higher than the recorded 2.3 percent in September 2020.

For the first nine months of the year, inflation averaged 4.5 percent, well above the upper end of the government’s 2 to 4 percent target.

According to the PSA, main drivers for the lower inflation include the slower increase in the transportation segment, growing by just 5.2 percent from the posted 7.2 percent in the previous month.

Inflation in the National Capital Region (NCR) slowed to 3.5 percent from the listed 3.7 percent in the same comparable period.

On the other hand, inflation in areas outside NCR was kept at 5.2 percent.

Calibrated measures

Socioeconomic Planning Secretary Karl Kendrick Chua said lower food inflation can be achieved through further calibration in the implementation of government interventions such as the Executive Orders (EO) 133 and 134 or the move to allow higher pork imports with lower tariff rates.

“The proactive implementation of EO 133 and 134 have helped stabilize pork prices. The government is continuously accelerating and calibrating its implementation so we can further lower pork prices towards their pre-African Swine Fever (ASF) level,” Chua explained.

The government adopted EO 133 and 134 in May 2021 to help increase the supply of pork in the country amid its shortage due to the ASF.

Chua then noted that higher import volume for fish like mackerel and bonito will be allowed to help augment the fish supply in the coming closed fishing season.

“To cover the expected supply gap during the upcoming closed fishing season, the government will temporarily allow more imports in the fourth quarter of 2021 and the first quarter of 2022,” he said.

“The government will continue to proactively monitor the supply and demand of these commodities to ensure access to affordable food amid the pandemic,” he concluded.

Within expectation

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said the latest inflation figure remained within their expectations, touching the lower end of their 4.8 to 5.6 percent forecast range.

“The risks to the inflation outlook remain tilted towards the upside for the remaining months of 2021, but remain broadly balanced for 2022 and 2023.” Diokno said.

“Upside risks may come from pressures on world commodity prices, effects of weather disturbances, and prolonged recovery from the ASF outbreak,” he added.

According to him, downside risks could come from the spread of the more contagious COVID-19 variants and the weaker-than-expected global growth prospects.

Still, the BSP chief expects inflation to settle within the 2 to 4 percent target range in 2022 and 2023.

“Looking ahead, the BSP stands ready to maintain its accommodative monetary policy stance for as long as necessary to support the economy’s sustained recovery to the extent that the inflation outlook would allow,” Diokno said.

Nicholas Mapa, senior economist at the ING Bank said the slightly lower inflation will provide the central bank more space to maintain its accommodative monetary policy stance.

“Pressure has been building on the BSP to hike prematurely but the surprise inflation print helps the central bank justify its current stance,” Mapa said.

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