By Chino S. Leyco
The rate of increase in consumer prices in September quickened to its fastest pace since March last year due to the uptick in commodity prices, data from the Philippine Statistics Authority (PSA) showed.
Inflation last month rose to 2.3 percent, higher compared with 1.8 percent in the previous month, and 0.4 in the same period last year.
The National Economic and Development Authority (NEDA) attributed the faster upward inflation on higher food and fuel prices during the month.
“The increase in inflation can be attributed to the decline in production since August and the low base effect for non-food items,” NEDA Officer-in-Charge Rosemarie G. Edillon said in a statement.
But still, the September inflation is within the forecast of the Bangko Sentral ng Philippines (BSP) of 1.6 percent to 2.4 percent.
BSP Governor Amando M. Tetangco Jr. said the September figure was consistent with the central bank’s expectation that inflation will slowly inch up towards the target range over the policy horizon.
The increase also confirmed that at moment there is no compelling reason to change settings on BSP’s policy rates, Tetangco said.
“Nevertheless we will continue to closely monitor developments including financial market volatility and impact of possible adjustments to the tax structure on consumption patterns and relative prices of assets,” Tetangco said.
Food inflation accelerated to 3.1 percent in September from 2.5 percent in the previous month due to the adverse effects brought about by the series of tropical cyclones that devastated the country.
“Rice prices will remain stable since the 250,000 MT of rice imported from Thailand and Vietnam is expected to arrive by the end of October,” the NEDA official said.
However, the risk of La Niña developing in the fourth quarter is still looming over the country at 41 percent in September to November and 40 percent in October to December, according to the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA).
“We must keep on strengthening the agricultural sector through a comprehensive agricultural development program that aims to increase the resiliency of the sector and create a balance in agricultural policy,” Edillon, who is also NEDA deputy director-general, said.
“This is a major component of the proposed Philippine Development Plan 2017-2022,” she added.
Also, non-food inflation increased to 1.5 percent from 1.1 percent in the previous month. This is due to the price increase in all major non-food items such as housing, water, electricity, gas and other fuels, and transport.
“However, inflation will remain low and stable for the rest of the year with the continuous expansion of the domestic economy, solid private household consumption and investment, buoyant business and consumer sentiment, and adequate credit and domestic liquidity,” Edillon said.
Full-year inflation for 2016 is expected to be slightly lower than the government’s inflation target of two to four percent.
But international and domestic risks however, are tilted to the upside from a possible rally in oil prices, depreciation of the peso against the US dollar, and pending petitions for electricity rate increases.
Tags: Inflation picks up in September to 2.3% on higher commodity prices, manila bulletin, mb.com.ph, National Economic and Development Authority (NEDA), news today, PAGASA, Philippine Statistics Authority (PSA)
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