Fresh record low inflation seen this month — DOF
Consumer prices in the country could set another fresh record low this month due to tamed food price changes, latest estimates by the Department of Finance (DOF) revealed.
In his latest Economic Bulletin, Finance Undersecretary and Chief Economist Gil S. Beltran said that inflation in September may fall to 0.5 percent, breaking the record low of 0.6 percent registered in the previous month.
“Inflation in September is expected to stay below one percent,” Beltran said. “The slow rise in prices is tempered and will continue to be tempered by tamed food price changes.”
Beltran added that low consumer prices of other basic commodities such as fuels and transportation continue to benefit from developments in the international market.
He also cited that lower electricity rates of Manila Electric Co. (Meralco), which were slashed for five months in a row, would temper the increase in inflation during month.
For September, Meralco electricity rates are 17 percent less than that of last year, the DOF official said.
Beltran, however, noted that the impending El Niño phenomenon may undermine the weaker than expected inflation this year.
“It is important that the gains in taming food inflation not be undermined by the impending El Niño phenomenon. Measures should also be in place to address adverse effects the dry spell would inflict on agricultural production and hydro-electric power generation,” Beltran said.
“These may include repair and construction of irrigation systems and farm-to-market roads, early importation of rice, cloud-seeding operations and water conservation campaigns,” he added.
Earlier, the Philippine Statistics Office (PSA) reported that the country’s inflation eased to 0.6 percent last month from 0.8 percent in July amid declining food prices, cheaper power rates and lower transport fares.
The August inflation rate was well below than 4.9 percent incurred in the same month last year. But within the Bangko Sentral ng Pilipinas’ (BSP) forecast of 0.2 percent to one percent.
In the first eight months of the year, the average inflation settled at 1.7 percent, below the government’s target for the year.
For 2015, the BSP has set an inflation target of two percent to four percent, but latest forecast of the central bank shows inflation falling below the target at 1.9 percent this year.
The central bank expects inflation falling within the target starting next year.
Earlier, BSP Governor Amando M. Tetangco Jr. said the central bank would continue to monitor the price in the world market as well as the impact of the prolonged El Niño that is expected to last until the first quarter of next year.
“We’ll continue to monitor developments in global oil prices, track El Niño as well as coordinate with relevant agencies of government on mitigants to El Niño’s adverse impact. We’re also mindful of global developments and their effects on domestic liquidity,” Tetangco said.