DOF: September inflation likely unchanged from August's 6.4%
MANILA, Philippines — Inflation in September was likely steady from the previous month despite elevated food prices, the Department of Finance said Friday, as the government beefs up its battle against rising commodity prices.
In an economic bulletin, DOF chief economist Gil Beltran sees September inflation hitting 6.4 percent, the highest level in almost a decade.
If realized, this month’s inflation print would be unchanged from August and would still perch above the government’s 2-4 percent target range.
According to Beltran, high food prices were the main drivers of inflation in September. Meanwhile, a decline in power rates “moderated” price pressures from non-food items, he added.
“Strong monetary action... and the president’s support to administrative measures proposed by the Economic Development Cluster to remove non-tariff barriers on major food items will moderate food inflation in the short run,” Beltran said.
“Policy reforms including rice tariffication and budget support for agricultural productivity programs will stem similar inflation episodes in the future,” he added.
In a bid to temper consumer demand that likely lifted consumer prices, the Bangko Sentral ng Pilipinas has delivered rapid-fire interest rate hikes of 1.5 percentage points since May, its strongest action against inflation since 2000.
Monetary authorities have likewise conceded to missing their 2-4 percent target band for inflation this year and next, averaging 5.2 percent in 2018 and 4.3 percent in 2019.
To address food supply bottlenecks, President Rodrigo Duterte recently signed four orders seeking to streamline the entry and delivery of imported farm products.
Philippine policymakers have been concerned about threats posed by soaring prices on the economy, which posted a sluggish growth of 6 percent in the second quarter, the slowest pace in three years.
Some analysts expect economic growth to continue to decelerate over the second semester of the year as tighter monetary policy and higher inflation weigh on consumer spending, which accounts for about seven-tenths of the Philippine economy.
In a Pulse Asia survey released on Thursday, 65 percent of respondents believe inflation is an urgent concern for the government.
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