Inflation slows further to 0.9% in September

Inflation slowed down further in September, clocking in below 1%, as commodity prices continued its downtrend, the Philippine Statistics Authority (PSA) reported on Friday.

Inflation or the rate of increases in the prices of goods and services hit 0.9% last month, slower than 1.7% recorded in August.

This also compares with the 6.7% inflation posted in September 2018.

This brought the year-to-date inflation for 2019 to 2.8%, within the government’s target of 2-4% for the entire year.

“This is the lowest inflation since June 2016, in which the inflation rate was 1.3%,” PSA chief and National Statistician Claire Dennis Mapa said in a press briefing in Quezon City.

“Contributing primarily to the downtrend in the inflation during the month was the annual drop in the index of heavily-weighted food and non-alcoholic beverages,” she added.

The PSA noted the annual decreases in the following food groups:

• Rice: from -5.2% to -8.9%
• Corn: from -3.7% to -4-1%
• Vegetables: from -1.4% to -4.7%
• Sugar, jam, honey, chocolate and confectionery: from -2.9% to -4.1%

Also contributing to the inflation downtrend were slower annual mark-ups in the following food groups:

• Fish: from 2.8% to 1.4%
• Oils and fats: from 1.8% to 1.2%

“The slowdown was also brought about by the slower annual rate in housing, water, electricity, gas, and other fuels,” Mapa said.

The PSA observed  negative annual rates in the following commodities:

• Electricity: from -2.6% to -5.8%
• LPG: from -8.9% to -11.1%
• Kerosene: from -4.9% to -7.0%

“Transport also contributed to the downward trend of the September 2019 inflation, particularly, petroleum and fuels for personal transport equipment, which declined further by 8.1% in September 2019 from -5.2% in August,” Mapa said.

Sought for comment, Security Bank chief economist Robert Dan Roces attributed the slower inflation last month to the rice supply levels which were “complete reverse from last year that caused high inflation.”

“Fuel also did not cause spikes as feared as global levels normalized,” Roces said.

Upside risks exist, however, from the African swine fever and geopolitical events, he said

“But we see inflation managed or well within BSP (Bangko Sentral ng Pilipinas) target,” Roces said. 

The top contributor to the overall inflation, among 11 major commidity groups, was Restaurant and Miscellaneous Goods and Services which recorded an annual rate if 3.0%.

The share of the commodity Group to the overall inflation was 45.8%.

The second commodity group that contributed to inflation in September was Alcoholic Beverages and Tobacco, which posted 14.3% inflation and a share of 27.5% to the overall rate.

The third major contributor was Housing, Water, Electricity, Gas, and other fuels at 0.8% and 21.4% contribution.

Inflation in the National Capital Region matched that of the national level at 0.9%, while inflation in areas outside NCR slowed to 1.8%. —KBK, GMA News