September inflation sizzles to over 3-year high

MANILA, Philippines — Inflation in September accelerated at its fastest pace in more than three years, driven mainly by faster food price increases, according to the Philippine Statistics Authority (PSA).

In a press conference, National Statistician Dennis Mapa said that headline inflation, or the annual change in consumer goods and services, accelerated to 7.2 percent in September from 6.1 percent in August.

It was also faster than the 1.7-percent print in September last year.

The latest inflation result ended a four-month easing streak and matched the 7.2 percent inflation outturn in April this year.

Mapa said the September inflation result is also the highest since the 7.6 percent print in March 2023.

Despite the faster print, September inflation was within the Bangko Sentral ng Pilipinas (BSP)’s forecast range of 6.4 to 7.4 percent for last month.

Faster annual growth in food and non-alcoholic beverages drove the higher September inflation, rising to 6.7 percent from 4.6 percent in August.

Inflation for food alone recorded a faster annual increase of 6.8 percent in September from the previous month’s 4.6 percent.

The uptrend in food inflation was mainly driven by vegetables, which rose 10.7 percent annually in September from a 3.4-percent decline the previous month amid heavy flooding.

Inflation for rice, the country’s main staple food, also accelerated to 20.3 percent in September from 19.4 percent the previous month.

Also cited as main drivers of the higher overall inflation in September are housing, water, electricity, gas and other fuels, which rose to 8.4 percent from 7.9 percent the previous month, and transport costs, which rose to 14.6 percent from 13.5 percent in August.

Other commodity groups with faster annual increases in September than in the previous month include alcoholic beverages and tobacco; clothing and footwear; furnishings, household equipment and routine household maintenance; health; recreation, sport and culture; education services; restaurants and accommodation services, and personal care and miscellaneous goods and services.

From January to September, inflation averaged 5.4 percent, above the government’s two to four percent target band.

Mapa said there are many risk factors for inflation in the coming months.

“We don’t know whether it is still seven percent, but what we are seeing is that…there are a lot of risks,” he said when asked if seven percent is the new normal for inflation.

He said inflation has become fairly widespread, with 11 out of 13 commodity groups being tracked by the PSA showing upticks.

“So while we hope that it will go down, what we are seeing is that there are a lot of risks in terms of the items,” Mapa said.

He said the recent fare hikes have not been captured in the latest inflation print and are expected to be reflected in the October result.

As for the impact of the Super El Niño, he said this is expected to be seen in the coming months.

Given the latest inflation result, the Department of Economy, Planning and Development (DEPDev) said the government is intensifying efforts to strengthen food supply, temper energy costs and shield households from rising prices.

“September’s inflation rise was driven mainly by disruptions in food supply caused by adverse weather and higher global oil prices,” DEPDev Secretary Arsenio Balisacan said.

“These are significant supply-side pressures, but they are being met with targeted interventions to mitigate the impact on households,” he added.

To temper price increases, government measures include suspending excise taxes on liquefied petroleum gas and kerosene and pushing for toll waivers on major highways for the transport of agricultural goods.

The government is also expanding palay storage capacity and rolling out the country’s first commercially approved African Swine Fever vaccine to strengthen food supply for the holiday season.

As part of preparations for the El Niño, the government is also advancing the procurement of key agricultural inputs, expanding food and cold storage facilities, conducting cloud-seeding operations and providing targeted assistance.