PSA: Inflation faster at 6.1% in September 2023

Inflation rate accelerated further in September due to swifter increases in food prices, particularly rice, as well as faster growth in transport costs amid higher fuel prices, the Philippine Statistics Authority (PSA) reported on Thursday.

At a press briefing, National Statistician and PSA chief Claire Dennis Mapa said inflation — or the rate of increase in the prices of consumer goods and services — clocked in at 6.1% last month, faster than the 5.3% rate seen in August.

Year-on-year, September’s inflation print was slower than the 6.9% seen in the same month last year. It also fell within the Bangko Sentral ng Pilipinas’ (BSP) forecast range of 5.3% to 6.1%. 

The year-to-date inflation rate stood at 6.6%, still above the government’s target ceiling of 2% to 4%.

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“Ang pangunahing dahilan ng mas mataas na antas ng inflation nitong Setyembre 2023 kaysa noong Agosto 2023 ay ang mas mabilis na pagtaas ng presyo ng Food and Non-Alcoholic Beverages,” Mapa said.

(The main factor to the faster inflation rate in September 2023 compared to August 2023 was the faster increase in the prices of Food and Non-Alcoholic Beverages.)

The Food and Non-Alcoholic Beverages index saw an inflation print of 9.7%, faster than the 8.1% rate in August, and a share of 84.4% to the overall increase.

“Ang nag-ambag ng malaki sa pagtaas ng inflation ng Food and Non-Alcoholic Beverages ay ang mas mabilis na pagtaas ng presyo ng cereals and cereal products, na may 14.1% inflation. Ang halimbawa nito ay bigas,” the PSA chief said.

(Contributing to the faster inflation in Food and Non-Alcoholic Beverages was the faster increase in the prices of cereals and cereal products, which had an inflation of 14.1%. An example of this is rice.)

Apart from cereals, meat and other parts of slaughtered land animals also contributed to the faster inflation in the Food and Non-Alcoholic Beverages index, with an inflation rate of 1.3% from -0.1% in August.

The second commodity group that caused the overall acceleration of inflation in September was the Transport index, with a rate of 1.2% from 0.2% and contributed 12.6% to the uptrend.

The higher inflation print for Transport was due to slower decline in the prices of gasoline, which saw an inflation rate of -2.4% from -8.7% and diesel with a rate of -12.7% from -16.1%.

Moreover, higher year-on-year increments were seen in the indices of Health (4.1% from 3.9%); Recreation, Sport and Culture (5.1% from 4.9%); and Education Services (3.6% from, 2.9%). 

Food inflation

Food inflation, which tracks price movements in a “basket” of foods commonly purchased by households, grew to 10% from 8.2% in the preceding month and also faster than the 7.7% rate seen in September 2022.

The main culprit for the faster food inflation was rice, which saw a double-digit inflation rate of 17.9%, its fastest since March 2009 when it hit 22.9%.

The double-digit acceleration of rice inflation came despite the government's imposition of price ceilings for regular and well-milled rice varieties of P41 per kilo and P45 per kilo, respectively.

Asked if the price caps were effective in controlling rice inflation, Mapa said the compliance was “mixed” in various areas.

He said out of 2,601 monitored regular milled rice products, only 640 fell within the P41 per kilo price cap.

For well-milled rice, the compliance to the P45 per kilo price ceiling was about 20% or 687 out of 3,498 products monitored.

Mapa, however, admitted that determining effectiveness of the price control measures needs further study.

Apart from rice, drivers to the uptrend in food inflation were meat (1.3% from -0.1%), fruits and nuts (11.6% from 9.6%), and corn (1.6% from 0.9%).

Interventions

In a separate news release, National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said, “The government is committed to providing targeted assistance to affected vulnerable segments of the population while food prices remain elevated.”

Balisacan cited the Department of Social Welfare and Development’s (DSWD) Food Stamp Program launched on September 29, 2023.

The program aims to address the lingering incidence of food poverty and malnutrition among low-income Filipino households by providing monthly meal augmentation worth P3,000.

This will benefit families classified as “food poor” by the PSA, along with pregnant and nursing mothers.

The Land Transportation Franchising and Regulatory Board also has provided fuel subsidies to 74,089 public utility vehicles as of September 27, 2023,

Balisacan said the DSWD will provide a P10,000 cash subsidy to 78,000 farmers listed in the Pantawid Pamilyang Pilipino Program (4Ps).

Additionally, rice farmers are set to receive P5,000 as financial assistance to help sustain their productivity amid the increasing cost of production, according to Balisacan.

The government’s chief economist said that on September 18, 2023, the National Food Authority Council set a new buying price for palay, raising the buying price of dry palay from P19.00 to P23.00 and the buying price of wet palay from P16.00 to P19.00.

“This increase aims to provide Filipino farmers with higher income,” Balisacan said.

The NEDA chief noted that to help ensure efficient transportation and reduce the costs of agricultural products, President Ferdinand Marcos Jr. issued EO No. 41, which prohibits the collection of pass-through fees on national roads and urges local government units to suspend the collection of fees from vehicles transporting goods.

Moreover, Balisacan said that should the global price of rice continue to rise due to the impacts of El Niño and rice export bans among key rice-exporting countries, resulting in a need for a more robust response to stabilize local prices, the proposal to temporarily lower tariffs on rice, regardless of origin, may be revisited.

“As we implement short-term measures to ease the negative effects of inflation, it is imperative that we also address our long-term food supply issues by providing support for our local farmers to boost their productivity and resilience. These include investing in irrigation, modern high-yielding varieties, pest control, and logistics,” the NEDA chief said. —KBK, GMA Integrated News