Headline inflation slowed to 1.9 percent in September, the slowest pace since the onset of the COVID-19 pandemic, the Philippine Statistics Authority reported on Friday.
The PSA attributed the decline to sluggish increases in the costs of utilities, food and non-alcoholic beverages, as well as restaurant and accommodation services.
The latest inflation figure, the lowest since the 1.6 percent recorded in May 2020, brings the average inflation rate for the year to 3.4 percent, comfortably within the Bangko Sentral ng Pilipinas target range of 2.0 to 4.0 percent.
This positive trend provides the central bank with more flexibility to ease monetary policy further during its upcoming meeting in October.
The BSP has already taken steps to address inflationary pressures, having reduced the overnight rates by 25 basis points in August and significantly lowered banks’ reserve requirement ratios in September. The easing inflation rate contributes to a more favorable economic outlook.
Economic Planning Undersecretary and National Statistician Dennis Mapa said the slowdown in food inflation played a key role in the overall deceleration, particularly noting a reduction in the inflation rate for rice, which dropped to 5.7 percent from 14.7 percent in August.
The rice staple accounts for 9 percent of the basket goods and services used for tracking inflation and at 18 percent double the rate for families in the bottom 30 percent income bracket.
“There has been a drop in the nominal price of rice since July but not substantial,” said Mapa. He added that the price of fish and vegetables, particularly tomato and onion, was also substantially lower than last year.
Food inflation eased to 1.4 percent in September from 4.2 percent in August and 10.0 percent in September 2023.
Mapa said a series of reductions in gasoline and diesel prices in September also helped tame inflation.
Core inflation, which excludes certain food and energy items, eased to 2.4 percent in September from 2.6 percent in August and 5.9 percent in September last year.
Inflation rate for the bottom 30 percent income household eased to 2.5 percent in September from 4.7 percent in August and 6.9 percent in September last year. The average so far this year is 4.6 percent.
