MANILA, Philippines – Inflation eased to 1.9% in September 2024, marking the lowest rate since May 2020’s 1.6%.
In the prior month, August 2024, inflation was at 3.3%. A year ago, in September 2023, it was at 6.1%.
Year-to-date, average headline inflation is 3.4% — well within the government’s target range of 2% to 4%.
The Bangko Sentral ng Pilipinas (BSP) had earlier projected September inflation would fall between 2% and 2.8%. Factors driving prices down include negative base effects, strengthening of the peso, and lower costs for rice, meat, vegetables, and oil. However, rising prices for fish, fruits, and electricity were expected to push inflation up.
With inflation declining for the second consecutive month, Finance Secretary Ralph Recto noted that it seems to be on a downtrend. This, he added, could give the central bank room for another rate cut before the year ends.
“Ang Fed, nagbaba ng 50 basis points, or half a percent. Palagay ko tayo, kaya din natin ‘yung half a percent,” Recto said in a Palace press briefing on September 24, referring to the United States Federal Reserve.
(The Fed cut rates by 50 basis points, or half a percent. In my opinion, we can also do half a percent.)
The BSP already lowered its key policy rate by 25 basis points on August 15 — the first reduction in nearly four years. The Monetary Board is set to meet again on October 16, with the possibility of another rate cut on the table.
Recto estimated full-year inflation in 2024 would settle at around 3.4%, and between 2.9% and 3.1% in 2025.
However, the finance chief cautioned that the brewing conflict in the Middle East could threaten the favorable inflation forecast, especially if it develops into a full-scale regional war that could cause oil prices to spiral.
“Our biggest challenge really is external headwinds. And one would be the war in the Middle East. So we don’t want that to go out of hand, and possibly oil price increases, which we have no control over,” he said. – Rappler.com
