Consumers prices continued to climb at the fastest pace in nearly four years to 6,9 percent in September on the back of rising food and energy costs, the Philippine Statistics Authority (PSA) reported on Wednesday, Oct. 5.
Headline inflation clocked in at 6.9 percent last month, higher than the 6.3 percent logged in August and the 4.2 percent in September last year, bringing year-to-date inflation to 5.1 percent. The actual rate, however, falls within the central bank’s forecast of 6.6 percent to 7.4 percent range.
In a briefing, National Statistician Claire Dennis Mapa said rising energy and food prices last month pushed inflation to the highest rate since the 6.9 percent recorded both in September and October 2018, or “at the height of rice price hike.”
Moreover, Mapa noted that the latest inflation reading is nearing the peak of 7.2 percent registered in February 2009, or during the global financing crisis widely referred to as “The Great Recession.”
Excluding selected food and energy items, core inflation slightly slowed to 4.5 percent in September from 4.6 percent in August. However, this was significantly faster that the 2.6 percent recorded a year earlier.
Following the release of the latest inflation data, Socioeconomic Planning Secretary Arsenio M. Balisacan said external headwinds continued to effect South East countries, including the Philippines, which have been seeing upticks in their inflation.
However, Balisacan pointed out that the Philippines was in the middle of the pack among its regional peers.
“This trend is observed in other countries as well, given the same experience of subdued demand or a low base the past year, because of Covid, and the external pressures this year from commodity prices, logistics bottlenecks, weather shocks, and wide swings in the exchange rate against the US dollar,” Balisacan said.
Electricity, gas, and other fuels had the highest contribution to inflation at 1.1 percentage point during the month.
Meanwhile, main contributors to the higher food inflation were meat, fish, and sugar. Operation of personal transport equipment and passenger transport services have also contributed.
Although fuel prices have been declining recently, these have remained elevated resulting in high input costs, especially for farmers and fisherfolk, Balisacan said.
Inflation in all regions in the country also went above target in September. Davao (Region 11) and Zamboanga Peninsula (Region 9), CARAGA (Region 13) and Central Visayas (Region 7) posted the highest inflation rates among the regions.
“Today’s inflation is far more complex than what we have seen in recent decades. The government and its stakeholders need to collaborate for shared solutions,” Balisacan said.
“In the near-term, ensuring sufficient food supply, while assisting the most vulnerable sectors will help us hurdle the current challenges,” he added.
From January to September, average inflation stood at 5.1 percent, within the government’s assumption of 4.5 percent to 5.5 percent for 2022, but well above the 2.0 percent to 4.0 percent target.
In a statement, the Department of Finance (DOF) said inflation is expected to remain elevated for the last quarter of 2022 with the recent fare hike and the impact of typhoon “Karding” on food supply.
“The country needs to produce and import the needed commodities. Given regional production and price disparities, it is equally important that these goods are efficiently distributed,” DOF said.
“However, inflation is still seen to fall within the 4.5 percent to 5.5 percent assumption of the Development Budget Coordination Committee (DBCC) for 2022,” the department added.
Meanwhile, Nicholas Antonio T. Mapa, ING Bank N.V. Manila senior economist said that September inflation rate is not yet the peak.
“Follow through impact of third round of transport fare hikes and elevated food prices due to supply disruption from storm to keep inflation elevated. The Bangko Sentral ng Pilipinas admits upside risks dominate inflation outlook,” Mapa said.