Higher food prices pushed September CPI to 3.4 percent

October 5, 2017

Higher food prices caused the September inflation rate to rise 3.4 percent, its highest in five months, from 3.1 percent in August, but still within the central bank's expectations.

"This was primarily due to the 3.6 percent annual growth recorded in the heavily-weighted food and non-alcoholic index," said the Philippine Statistics Authority (PSA)  Thursday

The 3.4 percent figure is within the Bangko Sentral ng Pilipinas’ forecast of 2.8 to 3.6 percent and is only slightly higher than median market expectations of 3.2 percent, said the National Economic Development Authority (NEDA) in a statement.

Core inflation, which excludes select volatile food and energy prices, also accelerated to 3.3 percent from 3 percent in August.

“We are still positive that inflation for full year 2017 will settle within the government’s target of 2 to 4 percent. However, we still face several risks to inflation such as higher domestic fuel prices, weaker peso, and minimum wage hike that will be effective today in the National Capital Region,” said Socioeconomic Planning Secretary Ernesto Pernia in a statement.

Higher food prices "can be partly traced to the lingering effects of Typhoon Jolina and Tropical Depression Maring, which caused damage to agriculture and fisheries in the CALABARZON region, particularly Quezon province,” Pernia said.

Total reported losses from  Maring were estimated at P77 million.

Non-food inflation reached 3.1 percent, its highest since February 2013.

This is due to faster year-on-year price adjustments in housing, water, electricity, gas and other fuels, transport, restaurants, and clothing and footwear, said NEDA.

“The government needs to closely monitor movements in domestic fuel prices and utility rates. Faster inflation in these sectors will negatively impact the spending capacity of lower-income households for basic necessities like food, and important services such as health and education,” Pernia said. DMS