Food, non-alcoholic drinks trigger inflation surge for 9th straight month

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FILE PHOTO. The rise in prices of widely-used goods will likely be at its fastest pace in August or September, a central bank official said.

Metro Manila (CNN Philippines, October 5) — Food and non-alcoholic beverages drove September inflation even higher for the ninth straight month at 6.7 percent, the Philippine Statistics Authority (PSA) said Tuesday.

This is only one point below CNN Philippines' poll of 19 economists and analysts who forecast a 6.8 percent inflation for September, mirroring that of the Bangko Sentral ng Pilipinas Department of Economic Research.

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The PSA said prices of food and non-alcoholic beverages rose by 1.2 percent from 8.5 percent in August.

Inflation in Metro Manila slowed down from 7 percent to 6.3 percent in August, the first drop since May. In areas outside Metro Manila, prices rose from 6.2 percent to 6.8 percent.

The Bicol region posted the highest inflation rate at 10.1 percent. The lowest was in Central Luzon at 4.5 percent.

PSA Undersecretary Lisa Grace Bersales said the impact of Typhoon Ompong contributed to higher inflation.

"We would usually collect in the first five days of the month and in the middle of the month. And therefore -- and Typhoon Ompong happened in the middle of the month. So this means that the effect of Ompong would have already been reflected in our september inflation estimate," Bersales said in a media briefing.

However, she explained new policies to curb the effects of rising prices were also factored in, such as the importation of meat and fish products and the release of rice supply.

"I believe that the interventions the government has been doing are taking their effect in NCR on more availability of these food items," she said.

What do the economic managers say?

BSP Deputy Governor Diwa Guinigundo told CNN Philippines while inflation further increased last month, the public must instead look at the momentum of month-on-month inflation.

"Hindi masyadong gumalaw ang presyo [Prices only slightly moved] relative to August," he said. "Pagka tinanggal mo 'yung [If you remove] seasonality, actually merong [there is a] decline."

Guinigundo said inflation has already peaked in September, which may indicate a slowdown in the rise of commodity prices in the next months.

"'Yung month-on-month niyan, dapat magsi-slow down na. Hindi ibig sabihin na babagsak ang presyo. 'Yung pagtaas ng presyo ng bilihin, 'yung ang babagal," he said.

[Translation: The month-on-month should slow down, but this does not there will be price drops. There will be less increase in prices of goods.]

Meanwhile, the Department of Finance, the National Economic Development Authority, and the Department of Budget and Management assured Filipinos in a joint statement that government is doing what it can to temper the rise in commodity prices.

The economic team welcomed the lower inflation in Metro Manila.

"These clear signs of easing boost our confidence that inflation will taper off by year end and go back to our target range by early next year. But we must couple this optimism with quick and focused actions in order to sustain gains made so far in keeping inflation in check," the joint statement read.

The agencies also attributed upward food prices to the impact of Ompong in the Ilocos region, the Cagayan Valley, and the Cordillera Administrative Region. They then called for the passage of the rice tariffication bill in the Senate, as the House has approved it in August.