DOF: Inflation picks up to 3.4% in September

Inflation likely picked up pace in September due to higher food, fuel and electricity prices, according to the Department of Finance (DOF).

Finance Undersecretary Gil Beltran said prices of goods may have risen 3.4 percent in September, up from 2.3 percent the same month last year and 3.1 percent in August 2017.

Beltran said the estimated increase in inflation could be attributed to hikes in food prices as well fuel and power rates.

“Weather disturbances caused price increases in food items, especially vegetables. Fuel price hikes and power rate increases contributed to the increase in the non-food commodity group,” Beltran said.

He added the higher inflation in September may have also been caused by base effects as fuel and electricity rates were lower in the same period last year.

According to the bulletin, prices of electricity, gas and other fuels in September were estimated to have increased 8.4 percent from five percent in August and negative 1.5 percent in September last year.

Diesel prices in particular averaged P33.44 per liter in September, up from P32.55 per liter the previous month and P25.74 per liter the previous year. Gasoline prices likewise climbed to P46.78 per liter.

Electricity rates during the month also rose to P9.25 per kilowatt hour from P8.38 per kWh in August and P8.46 per kWh last year.

Meanwhile, the price for food and non-alcoholic items in September may have climbed to 3.6 percent in September from 3.5 percent in the previous month and 3.1 percent a year ago, according to Beltran.

Despite the estimated uptick in consumer prices, Beltran said headline inflation is still within “manageable levels,” just slightly above the midpoint of the government two-to four-percent target range.

Headline inflation picked up to 3.1 percent in August from 2.8 percent a month ago and two percent in August last year. This brought average inflation to 3.1 percent in the first eight months.

For September, the Bangko Sentral ng Pilipinas is also forecasting inflation to settle within the 2.8 percent to 3.6 percent range.

The BSP’s Department of Economic Research said the expected increase in inflation could have been driven by higher petroleum prices, increase in electricity rates, the rise in prices of rice during lean months, as the weaker peso.