MANILA – Tempered price movement in food, power, and oil rates pushed inflation to another all-time low of 0.4 percent in September 2015, according to the National Economic and Development Authority (NEDA).

The Philippine Statistics Authority reported today that headline inflation rate recorded its lowest level, easing further to 0.4 percent in September 2015 from 0.6 percent in the previous month and from 4.4 percent in September 2014.

“We expect the current low inflation environment exhibited in the first nine months of 2015 to persist throughout the rest of the year, more so, as international oil prices continue to remain low and are not expected to increase significantly in the near term,” said Economic Planning Secretary Arsenio M. Balisacan.

Inflation in the food subgroup continued to ease in September 2015, (0.7% from 1.1%) following slower price adjustments in majority of its sub-items such as breads and cereals, fish, fruits, and rice. The declining prices of regular milled rice due to sufficient supply partly supported the downward trend in overall food prices. On the other hand, meat (0.4% from 0.3%) and vegetables (2.3% from 2.0%) exhibited slightly faster upward price adjustments relative to the previous month.
Non-food inflation also declined (-0.2% from 0.2%) resulting from the sustained lowering of prices of electricity, gas, and other fuels.

Meanwhile, core inflation—which excludes selected volatile food and energy prices—slid further to 1.4 percent from 1.6 percent in August 2015 and 3.4 percent in September 2014. Core inflation in the first nine months of 2015 averaged at 2.1 percent.

“The slowdown of core inflation further indicates that prices across a broad range of consumer items continue to remain stable,” the Cabinet official said.

Inflation for the National Capital Region (0.1% from 0.2%) and other regions in the country (0.4% from 0.8%), were also restrained in September 2015 relative to the previous month.

Balisacan noted that while low oil prices are likely to provide a cushion to upside inflationary pressures, government should remain wary of the upside risks to inflation such as the current El Niño episode in the country.

“Government must ensure that food supply is sufficient by improving the level of inventories and efficiency of the distribution system. Continued monitoring of drought occurrence in agricultural areas is necessary to ensure timely policy actions, including importation of rice and other basic commodities to augment domestic supply,” Balisacan said.

The NEDA Director-General added that expanding agriculture support structures from production areas to the demand centers will also further bring down the cost of transporting goods and services.

As the El Nino intensifies, Balisacan said that the government may consider increasing the number of agricultural workers as potential beneficiaries in the Pantawid Pamilyang Pilipino Program to offset farm output losses. He said government must also ensure that access to finance in the agriculture and fisheries sectors remains unhampered.