Philippine headline inflation or overall inflation slowed down further to 1.9% in September 2024, the lowest so far for this year and lower than the 2% to 2.8% projection of the Bangko Sentral ng Pilipinas (BSP) for the month.

The September inflation was also lower compared to the 3.3% of August, and was the lowest since the 1.6% of May 2020. According to the Philippine Statistics Authority (PSA), the September inflation figure brings the national average inflation from January to September 2024 to 3.4%, which is within the government’s target of 2% to 4%.

The PSA said that the lower September inflation rate was primarily caused by the slower increase in the prices of food and non-alcoholic beverages, and the decrease in transport costs. These were caused by the agriculture sector recovering from the effects of the El Nino, and lower global prices of crude oil.

“The downtrend in the overall inflation in September 2024 was primarily brought about by the slower annual increment in the index of food and non-alcoholic beverages at 1.4% September 2024 from 3.9% in the previous month,” the agency said.

“Also contributing to the downtrend was transport with a faster year-on-year decrease of 2.4% during the month from a 0.2% annual drop in August 2024. In addition, a slower inflation rate was recorded for housing, water, electricity, gas and other fuels during the month at 3.2% from 3.8% in August 2024,” PSA added.
Furthermore, the PSA said lower annual increments were also noted in the indices of the following commodity groups during the month:

          a. Alcoholic beverages and tobacco, 3.1% from 3.3%;
          b. Clothing and footwear, 2.9% from 3.0%;
          c. Furnishings, household equipment and routine household maintenance, 2.6% from 2.7%;
          d. Information and communication, 0.4% from 0.5%; 
          e. Recreation, sport and culture, 2.8% from 3.3%;
          f.  Education Services, 4.3% from 5.5%;
          g. Restaurants and accommodation services, 4.1% from 4.6%; and
          h. Personal care, and miscellaneous goods and services, 2.9% from 3.0%.

Meanwhile, the top three commodity groups contributing to the September 2024 overall inflation were the following:

          a. Housing, water, electricity, gas and other fuels with 34.9% share or 0.7 percentage point;
          b. Food and non-alcoholic beverages with 27% share or 0.5 percentage point; and
          c. Restaurants and accommodation services with 20.1% share or 0.4 percentage point. 

The PSA also said that there was a slowdown in food inflation at the national level, easing to 1.4% in September 2024 from 4.2% in the previous month. In September 2023, food inflation was higher at 10%.

“The deceleration of food inflation in September 2024 was primarily brought about by the slower inflation rate of rice at 5.7% in September 2024 from 14.7% in the previous month,” it said.

“This was followed by vegetables, tubers, plantains, cooking bananas and pulses with a faster year-on-year decline of 15.8% during the month from 4.3% annual decrease in August 2024,” PSA added.

Earlier, the BSP projected the September inflation to settle between 2% and 2.8%, citing lower prices of a number of farm products and lower domestic prices of fuel.

“Negative base effects along with lower prices of food commodities, including rice, meat, and vegetables, as well as lower domestic oil prices, and the appreciation of the peso are the primary sources of downward price pressures for the month,” the central bank said.

(PHOTO FROM PNA WEBSITE)