Inflation decelerates for 2nd straight month to 2.3% in September

Headline inflation decelerated for the second consecutive month in September, the Philippine Statistics Authority (PSA) reported Tuesday.

In a virtual briefing, National Statistician Claire Dennis Mapa reported September inflation at 2.3%. This compares with the 2.4% in August and the 0.9% in September 2019.

"Ang pangunahing dahilan ng pagbaba ng antas ng inflation sa buwan ng Setyembre 2020 ay ang mas mabagal na paggalaw ng presyo ng food and non-alcoholic beverages," he said.

Inflation for the food and non-alcoholic beverages index eased to 1.5% in September from 1.8% in August. Slower inflation was also recorded for alcoholic beverages and tobacco (12.9%); clothing and footwear (1.8%); furnishing, household equipment, and routine maintenance of the house (3.7%); and recreation and culture (-0.5%).

On the other hand, annual increases were registered in the indices of housing, water, electricity, gas, and other fuels (1.2%); transport (8.3%); communication (0.4%); and education (0.9%).

For the National Capital Region (NCR), inflation remained at 2.2% for the third consecutive month, while it slowed down further to 2.4% for areas outside NCR.

Inflation faster for bottom 30%

Inflation also continued to be faster for the bottom 30% households versus the national average, a trend which was first seen in April.

The rate for the bottom 30% income households accelerated to 2.8% in September, faster than the 2.7% in August and the 0.2% in September last year.

Mapa attributed the faster inflation for the bottom 30% households to higher transportation prices, particularly on the increase in tricycle fares which grew by 119% to an average of P18.60 in the NCR from P8.50 last year.

"Our projection here is that the transport index would still increase because of the base effect, particularly itong tricycle, I understand because of the social distancing, nagdadagdag talaga sila ng fare," he said.

"Ito rin 'yung nakikita naming datos sa mga regional centers, mga provinces outside NCR na parang dumoble 'yung (fares). We are seeing an increase in the transport index for the last three months of the year," he added.

Public transportation has been reallowed under the general community quarantine (GCQ), with tricycle fares up to make up for losses in line with complying with social distancing protocols.

Given this, a faster overall inflation for the bottom 30% households is expected moving forward given the weight of transport and food items.

"Yes, there is that feasibility that inflation for the bottom 30% will increase. Ang ano kasi, ang tingnan natin, 'yug weight ng ating bottom 30%," said Mapa.

For the bottom 30% households, food has the most weight accounting for 58%, followed by housing with 15.4%, and transportation with 5%.

The Bangko Sentral ng Pilipinas (BSP) earlier forecasted inflation for the month to settle within the 1.8% to 2.6% range.  —KBK, GMA News