Inflation slows down to 4.8% in September —PSA

Inflation or the rate of increase in the prices of goods and services decelerated slightly in September mainly on slower increase in transportation cost during the month, the Philippine Statistics Authority (PSA) reported on Tuesday.

At a virtual press briefing, PSA chief and National Statistician Claire Dennis Mapa reported that inflation last month clocked in at 4.8%.

This is slower than the 4.9% rate recorded in August, but faster than the 2.3% rate recorded in September 2020.

September’s inflation print settled within the Bangko Sentral ng Pilipinas’s (BSP) forecast range of 4.9% to 5.6%. 

Last month’s figures also brought the year-to-date average at 4.5%, still above the government’s target ceiling of 2% to 4%.

BSP Governor Benjamin Diokno told reporters in a Viber group message that inflation could remain elevated in the near term before decelerating to within the target range of 2% to 4% by the end of the year.

The central bank chief said inflation is projected to settle close to the midpoint of the target range in 2022 and 2023 with inflation expectations remaining firmly anchored to the target.

“Ang pangunahing dahilan ng pagbagal ng antas ng inflation nitong Setyembre 2021 ay ang mas mabagal na paggalaw ng presyo ng Transport na may 5.2% inflation at 55.8% share sa pagbaba ng pangkalahatang inflation sa bansa,” Mapa said.

(The main reason for the slowdown of inflation rate in September 2021 was the slower movement in Transport prices with 5.2% and 55.8% share to the overall decline in inflation.)

Transport index’s inflation print in August was 7.2%.

“Ito ay dahil sa mas mabagal na pagtaas ng presyo ng mga pamasahe sa tricycle, na may inflation na 2.7%, pamasahe sa jeep, na may 1.2% inflation, at pamasahe sa bus, na may inflation na 0.9%,” he said.

(This is due to a slower increase in the prices of tricycle fare with 2.7% inflation, jeepney fare with 1.2% inflation, and bus fare with 0.9% inflation.)

In particular, August’s inflation rates for tricycle fare, jeepney fare, and bus fare were 9%, 3.9%, and 0.9%, respectively.

The second commodity group which saw a downtrend last month was the food and non-alcoholic beverages index with 6.2% inflation from 6.5% in August and had a 39.9% share to the overall slowdown.

This as the price indices of fish, meat and fruits declined to 10.2%, 15.6%, and -0.4%, respectively; from their respective August rates of 12.4%, 16.4%, and 0.1%.

Food inflation

In a separate statement, the National Economic and Development Authority (NEDA) said that food inflation decreased to 6.5% in September from 6.9% in August, “due to slower inflation rates in rice, fish, and meat.”

Rice inflation recorded zero growth, following the issuance of Executive Order No. 135. Likewise, fish inflation decelerated to 10.2% from 12.4%, according to the NEDA.

Meanwhile, meat inflation decreased to 15.6% from 16.4%, as pork inflation declined to 36.4% from 39%.

Moreover, month-on-month meat inflation continued to decline at -1.6%, suggesting some price stabilization following the implementation of EOs No. 133 and 134.

“The proactive implementation of EOs 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 level,” said Socioeconomic Planning Secretary and NEDA chief Karl Kendrick Chua.

The government adopted EOs 133 and 134 in May 2021 to help increase the supply of pork in the country amid a shortage caused by the African Swine Fever.

Such interventions increased the minimum access volume (MAV) for imported pork, and imposed a temporary reduction of pork tariffs, respectively.

The NEDA said average stocks of frozen pork in September — week 1 to week 3 — increased to 79,042 metric tons (MT) from 73,159 MT in August 2021.

The timely release of pork stocks will help address the supply gap and bring down pork prices, it said.

Meanwhile, to help augment the fish supply in the coming closed fishing season, the NEDA said the Department of Agriculture issued a Certificate of Necessity to Import (CNI) with a maximum importable volume of 60,000 metric tons of small pelagic fish such as galunggong, mackerel, and bonito for wet markets.

The government will proactively monitor the supply and demand of fish and immediately issue supplemental CNIs as necessary, the NEDA said.

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

The PSA chief also cited housing, water, electricity, gas, and other fuels index as a major contributor to September’s inflation with a rate of 3.8% and a share of 18.3% to the total.

Inflation in Metro Manila, outside NCR

Inflation in the National Capital Region (NCR) followed the national trend as it decelerated to 3.5% last month from 3.7% in August, brought primarily by the slowdown in the price index of food and non-alcholic beverages at 5.2% from 6.6% in the prior month.

On the other hand, inflation in areas outside NCR (AONCR) was unchanged at 5.2% due to mixed growth rates in the indices of commodity groups.

“Only four regions in AONCR exhibited higher inflation during the month. The highest inflation among the regions in AONCR in September 2021 was seen in Region V (Bicol Region) at 6.9%, while the lowest inflation remained in Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) at 2.5%,” the PSA said.

Inflation for bottom 30%

Inflation for the bottom 30% income households at the national level slowed down to 5% in September, from 5.3%.

This brought the average inflation for this particular group of consumers from January to September to 4.9%.

Following the national trend, the decrease in the inflation for the bottom 30% income households during the month was primarily due to the slower annual increase of the transport index at 4%, from its double-digit annual growth rate of 10.4% in August 2021.

Risks to inflation

Nonetheless, Diokno said 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.

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

“On the other hand, downside risks are seen from the spread of more contagious COVID-19 variants and weaker-than-expected global growth prospects,” Diokno added.

The central bank chief said 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. —KG, GMA News