PHILIPPINE INFLATION may have settled between 1.5% and 2.3% in September, amid higher prices of rice, fish and fuel, the Bangko Sentral ng Pilipinas (BSP) said.
At the lower end of the BSP’s forecast range, the headline inflation rate may have steadied month on month at 1.5%, the same as in August.
Inflation could have also picked up from the 1.9% print in September 2024.
The September print might also mark the first time in six months that the consumer price index (CPI) would have settled within the BSP’s 2-4% target range or since the 2.1% in February.
“Upward price pressures for the month are likely to arise from higher prices of rice and fish,” the central bank said in a statement on Wednesday. “Elevated domestic fuel costs likewise contribute to upside price pressures for the month.”
In August, rice inflation declined at a faster pace of -17% from -15.9% in July. Earlier, National Statistician Claire Dennis S. Mapa said that this might be the lowest for rice inflation this year.
Rice prices may have picked up in September, reflecting supply disruptions caused by bad weather and the 60-day ban on rice imports. The 60-day suspension on regular milled and well-milled rice imports took effect on Sept. 1.
At the same time, the BSP said lower costs of vegetables, meat and electricity may have partially tempered inflation in September.
Last month, the Manila Electric Co. lowered the overall electricity rate by P0.1852 per kilowatt-hour (kWh) to P13.0851 per kWh this month from P13.2703 per kWh in August.
“Going forward, the BSP will continue to monitor evolving domestic and international developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy formulation,” it said.
In a separate commentary on Wednesday, Aris D. Dacanay, HSBC economist for ASEAN (Association of Southeast Asian Nations) said inflation concerns, particularly on food, must be “on the table” in the Monetary Board’s next policy meeting.
“Accelerating to 2.7% y-o-y (from 2.3%), core inflation surprised to the upside in August, while inflationary pressures will likely persist from now until October as typhoons Ragasa (Nando) and Bualoi (Opong) likely took a toll on food supply,” he said.
Mr. Dacanay added that the extension of the rice import ban will add to the potential supply shock caused by typhoons.
However, he noted that the Monetary Board may be more cautious amid the peso’s weak performance against the United States’ dollar.
On Tuesday, the peso closed at P58.196 against the dollar, its weakest in two months or since the P58.32 per dollar seen on July 31.
HSBC expects the BSP to keep the benchmark rate at 5% at its next policy-setting meeting on Oct. 9.
“We think there is limited data to conclude with conviction that, indeed, the economy is slowing down,” Mr. Dacanay said. “While consumer vehicle purchases (are) falling and government capital spending (is) tightening, goods exports are still holding up.”
In August, the BSP trimmed its benchmark policy rate by 25 basis points (bps) for a third-straight meeting, bringing the rate to 5%. Since August last year, it has lowered borrowing costs by a total of 150 bps.
BSP Governor Eli M. Remolona, Jr. earlier said they could deliver a cut this month if the data show a slowdown in the economy. However, he noted at the Aug. 28 policy-setting meeting that the easing cycle is nearly over.
The Monetary Board has two policy-setting meetings left this year, on Oct. 9 and Dec. 11. — Katherine K. Chan
