MANILA – Faster price adjustments in food caused inflation to accelerate in September 2017, the National Economic and Development Authority (NEDA) said.
Based on a report of NEDA-attached agency Philippine Statistics Authority (PSA), headline inflation increased to 3.4 percent in September 2017 from 3.1 percent the previous month.
This 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.
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 M. Pernia.
Food inflation increased slightly to 3.6 percent from the previous month’s 3.5 percent. Faster price increases were recorded for corn, fish, vegetables, cereals, flour, bread, pasta, and oils and fats.
“The accelerated adjustments in food, particularly corn, fish, and vegetables, 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,” the Cabinet official said.
Total reported losses from Tropical Depression Maring were estimated to have reached PhP77 million.
“We must continue to strengthen the resiliency of communities not only to support low-income farmers but also to stabilize prices of agricultural commodities,” Pernia said.
He said that this can be done through programs on increasing access to technology, improving access of agriculture products to trade partners, and upgrading credit programs to include crop insurance so farmers are able to recover from losses.
“Farm-gate prices of chicken may also take some time to recover, but may pick up in time for the holidays. To ensure that the country is free from the H5 bird flu virus, the government should strictly enforce regular sanitation processes on farms,” Pernia added.
Meanwhile, 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.
“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.