Inflation eases anew to 2.3% in September with cheaper food items
Published Oct 6, 2020 9:24:00 AM; Updated Oct 6, 2020 11:57:00 AM
Metro Manila (CNN Philippines, October 6) — Prices of basic goods saw an even milder climb in September, sustaining a downtrend for the second straight month, according to government data released Tuesday
The Philippine Statistics Authority announced that September inflation was at 2.3 percent, slower than the 2.4 percent pace tallied in August but up from 0.9 percent a year ago.
National Statistician Dennis Mapa said the slowdown was due to slower increases in food costs at 1.5 percent, namely for vegetables – particularly eggplant and garlic – chicken, pork, as well as milk, cheese, and eggs. Cigarettes also saw a slower increase in prices.
Rice prices remain lower compared to a year ago, a trend sustained since May 2019 following the influx of additional supply from abroad.
Inflation tracks the price movements of basic goods like food and fuel. Expenses for restaurant meals, items for personal hygiene like rubbing alcohol, and other personal care items also rose for the month, the PSA said.
Meanwhile, transportation costs led price increases for the month as it surged by 8.3 percent, the fastest in nearly two years. Tricycle fares zoomed by 45.7 percent compared to a year ago, a sustained trend since July when public transportation vehicles were allowed to ply their routes again.
Mapa said the minimum tricycle charge is now averaging ₱18.60 in Metro Manila. Last year, it was ₱8.50. “Our projection is our transport index will still increase because of the base effect, particularly tricycles. Because of the social distancing, nagdadagdag talaga sila ng [they really raised the] fare,” he said.
By location, inflation was felt faster in the provinces at 2.4 percent against a 2.2 percent average in Metro Manila. Although rice and corn remained cheaper compared to last year in the regions, the prices of sugar, jam, and similar sweeteners inched up, alongside the price of fish and fruits.
Bicol residents bore the brunt of price increases, with costs up by 4.5 percent last month. On the other hand, Davao region saw the softest price spikes, logging just a 0.8 percent increase.
The slowdown came as the Philippines remained under community quarantine, with economic activity muted as fewer people head out to shop. Inflation has averaged 2.5 percent this year, well within the Bangko Sentral ng Pilipinas’ 2-4 percent target range and higher than the full-year forecast of 2.3 percent.
The BSP last week pegged September inflation at 2.2 percent, or from a range of 1.8-2.6 percent, citing lower prices of oil, rice, and electricity as the main drivers of the downtrend.
“Our projection here is that inflation will actually be bordering around this average of 2.4-2.5 percent going into the remaining months of 2020,” Mapa said in a press briefing.
However, the country’s poorest households were more affected by price increases. Data showed that inflation among the country’s bottom 30 percent income earners experienced 2.8 percent inflation rate as they had a more costly commuting experience. Mapa said these Filipinos are more likely to ride tricycles, a service which was forced to charge more as they can only carry one passenger at a time for drivers to make a profit.
Transportation expenses rose by 16.3 percent for this income group, double the headline rate.
Other sectors saw muted price movements, with recreation and culture slipping by -0.5 percent as many players remain shut during the pandemic.
ING Bank N.V. senior economist Nicholas Antonio Mapa said the slow inflation trend “will help preserve purchasing power for Filipinos consumers” amid the recession, but also demonstrates “fading economic momentum” as COVID-19 continues to crimp domestic activity.
BSP Governor Benjamin Diokno said separately that the September inflation print is within expectations. He added there are signs of “gradual” improvement in economic output which will receive a boost as previous monetary easing moves as well as the rollout of the Bayanihan to Recover as One Act find their way into the financial system.
SOURCE: https://www.cnnphilippines.com/business/2020/10/6/September-2020-inflation-slows.html
