Inflation in September slightly eased to 4.8 percent from 4.9 percent in August, on slower annual increases in transport and food prices, the Philippine Statistics Authority said Tuesday.
The figure brought the average inflation from January to September to 4.5 percent, above the target range of 2 percent to 4 percent for 2021. Inflation was 2.3 percent in September 2020.
National statistician and civil registrar general Dennis Mapa said in an online briefing the transport index registered an inflation of 5.2 percent in September, down from 7.2 percent in August. Mapa said the inflation in the National Capital Region for tricycle and jeepney fares softened to 2.7 percent from 9 percent in August.
Food inflation also decreased to 6.5 percent in September from 6.9 percent in August, on slower price increases of rice, fish and meat. Rice inflation recorded zero growth, following the issuance of Executive Order No. 135. Fish inflation decelerated to 10.2 percent from 12.4 percent.
Meanwhile, meat inflation decreased to 15.6 percent from 16.4 percent, as pork inflation declined to 36.4 percent from 39 percent. Month-on-month meat inflation continued to decline at -0.4 percent, suggesting some price stabilization following the implementation of EOs No. 133 and 134.
Bangko Sentral ng Pilipinas Governor Benjamin Diokno said the September inflation was within the forecast range of 4.8 percent to 5.6 percent for the month.
“Inflation could remain elevated in the near term before decelerating to within the target range of 2 to 4 percent by the end of the year. Inflation is projected to settle close to the midpoint of the target range in 2022 and 2023 with inflation expectations remaining firmly anchored to the target,” Diokno said.
“The recent slower inflation was mainly due to lower annual rate of increase in transport index. But the recent inflation upticks is expected to be driven largely by supply side factors related to weather disruptions, global oil prospects, and continued impact of the African swine fever,” Diokno said.
He said these supply side shocks would be best addressed by timely non-monetary policy interventions that could ease domestic supply constraints. The return of inflation to the target range is highly contingent on the successful implementation of these supply measures, he said.
“The risks to the inflation outlook remain tilted towards the upside for the remaining months of 2021, but remain broadly balanced for 2022 and 2023. Upside risks may come from pressures on world commodity prices, effects of weather disturbances, and prolonged recovery from the ASF outbreak. On the other hand, downside risks are seen from the spread of more contagious Covid-19 variants and weaker-than-expected global growth prospects,” he said.
Excluding selected food and energy indices, core inflation for the month remained at 3.3 percent.
Economic Planning Secretary Karl Kendrick Chua said the proactive implementation of EOs 133 and 134 helped stabilize pork prices.
“The government is continuously accelerating and calibrating its implementation so we can further lower pork prices towards their pre-African Swine Fever level,” Chua said.
The government adopted EOs 133 and 134 in May to help increase the supply of pork in the country amid its shortage due to ASF outbreak. These interventions increased the minimum access volume for imported pork, and imposed a temporary reduction of pork tariffs, respectively.
“To expedite the utilization of the additional MAV, the National Economic and Development Authority recommends to reduce restrictions in the MAV plus so that imported pork can be sold in more areas and to unload more pork stocks in cold storages to the markets,” Chua said.
The average stocks of frozen pork in September (week 1 to week 3) increased to 79,042 metric tons from 73,159 MT in August. The timely release of pork stocks will help address the supply gap and bring down pork prices, he said.
The Department of Agriculture, to help augment the fish supply in the coming closed fishing season, issued a certificate of necessity to Import with a maximum importable volume of 60,000 metric tons of small pelagic fish such as galunggong, mackerel, and bonito for wet markets. The government will proactively monitor the supply and demand of fish and immediately issue supplemental CNIs as necessary.
“To cover the expected supply gap during the upcoming closed fishing season, the government will temporarily allow more imports in the fourth quarter of 2021 and the first quarter of 2022. The government will continue to proactively monitor the supply and demand of these commodities to ensure access to affordable food amid the pandemic,” Chua said.