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Headline inflation rose to 6.9 percent year-on-year in September from 6.3 percent in August. This was within the BSP’s forecast range of 6.6-7.4 percent for September. The resulting year-to-date average inflation of 5.1 percent is above the Government’s average inflation target range of 2.0-4.0 percent for the year. Meanwhile, core inflation, which excludes selected volatile food and energy items to depict underlying demand-side price pressures, eased slightly to 4.5 percent in September from 4.6 percent in the previous month. On a month-on-month seasonally adjusted basis, inflation increased to 0.6 percent in September from 0.4 percent in August.
Most food items posted higher inflation readings year-on-year during the month. Year-on-year vegetable inflation went up, reversing the negative inflation rate in the previous month. Fish inflation also increased due to the adverse effects of seasonal weather conditions on domestic supply. Meanwhile, non-food inflation rose due to the increase in inflation for heavily weighted CPI items such as rent, utilities (housing, water, electricity, gas and other fuels), and restaurants, which offset the lower inflation for transport and education.
The latest inflation reading remains in line with the BSP’s assessment that inflation is likely to stay above target in the near term amid broadening price pressures and second-round effects. The BSP remains committed to bringing inflation back to the government target and continues to emphasize the importance of urgent non-monetary government interventions to ease domestic supply constraints. Looking ahead, the BSP remains vigilant in monitoring all risks to the inflation outlook and is prepared to take necessary actions to safeguard price stability.
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