Inflation continued to settle within the government’s 2 to 4 percent target despite a slight uptick in October this year.
In a briefing yesterday, National Statistician Dennis Mapa said headline inflation during the month was at 2.3 percent, slightly higher than the 1.9 percent recorded in September this year.
Inflation in October last year, however, was higher at 4.9 percent.
The latest data brings the national average inflation rate from January to October 2024 to 3.3 percent.
Mapa said the higher inflation in October was primarily influenced by the faster increase in food and non-alcoholic beverages at 2.9 percent from 1.4 percent in September 2024.
Despite the increase, the National Economic and Development Authority (NEDA) and the Bangko Sentral ng Pilipinas (BSP) are optimistic that inflation will remain within target this year.
“The latest inflation figures confirm that we are on track to keep inflation within target. The government is fully committed to ensuring price stability and protecting Filipino households from undue shocks,” NEDA Secretary Arsenio Balisacan said in a statement.
Balisacan assured the public that while recent weather disturbances posed challenges to the country’s food supply and logistics, the government will work “relentlessly to keep food available and prices steady, particularly for essential commodities.”
“With targeted support and streamlined food supply chains, we aim to ensure that food is affordable and accessible for Filipino families, especially those most vulnerable to price shocks when disasters hit us,” Balisacan said.
To mitigate the impact of natural disasters, Balisacan said the Department of Social Welfare and Development is implementing the Building on Social Protection for Anticipatory Action and Response in Emergencies and Disasters Program.
The program provides social safety nets and capacity-building measures to support affected communities.
The Philippine Atmospheric, Geophysical, and Astronomical Services Administration earlier forecast that La Niña will persist until the first quarter of 2025, with two to eight tropical cyclones expected to affect the country until April 2025.
“The President has mobilized all of government to ensure relief efforts are comprehensive and delivered on time. In addition, he has directed us to craft a robust solution to build the resilience of families and communities amid the onslaught of severe typhoons,” Balisacan said.
MEDIUM-TERM INFLATION PATH
In a separate statement, the BSP said the October inflation is within its forecast range of 2.0 to 2.8 percent.
“The latest inflation outturn is consistent with the BSP’s assessment that inflation will continue to trend closer to the low end of the target range over the succeeding quarters,” said the BSP.
“This reflects easing supply pressures for key food items, particularly rice,” it added.
The BSP said the balance of risks to the outlook for 2025 and 2026 has shifted toward the upside.
The upside risks to the inflation outlook include the potential adjustments in electricity rates and higher minimum wages in areas outside Metro Manila, while downside factors continue to be linked to the impact of lower import tariffs on rice.
“The Monetary Board will maintain a measured approach in its easing cycle to ensure price stability conducive to sustainable economic growth and employment,” the BSP said.
Department of Finance (DOF) Secretary Ralph Recto also assured that the government is doubling efforts to keep inflation within target.
“Our whole-of-government efforts, including intensive monitoring and mitigation of price increases on food and non-food items, are expected to keep inflation within our target range for the next two years, at least,” Recto said in a statement.
“The slight uptick in our October inflation rate was mainly caused by temporary factors, such as weather disturbances like Severe Tropical Storm Kristine and Super Typhoon Leon. We are on top of ensuring that the affected communities get the help that they need to recover faster from the recent disasters. In fact, the President has mobilized all agencies to quickly deliver relief, rehab, and assistance,” he added.
Recto said that while rice inflation accelerated to 9.6 percent from 5.7 percent in September, this was mainly due to the base effects from the implementation of Executive Order 39 or the imposition of a mandated price ceiling on rice, leading to an overall price decrease in October last year.
He said the DOF expects this to be temporary.
Citing data, he said that in the National Capital Region, the average retail price of imported rice for the second half of October 2024 went down by PHP3.50 per kilogram from the second half of June 2024.
This helped temper the prices of food commodities despite the onslaught of typhoons in October.
Recto said the DOF is also seeing a decline in rice prices in the international market, following the lifting of the export ban of India announced in late September.
To ensure that the Philippines takes advantage of the lower rice tariffs, the DOF said traders must ensure that reductions in tariffs are being passed on to consumers.
ON TARGET
House Ways and Means Committee Chair Joey Salceda of Albay’s 2nd District said he sees no major red flags in October’s inflation data, expressing optimism that the full-year inflation rate would remain on target, supported by a 10-month average of 3.3 percent.
“October’s inflation figure remains at the low end of the 2-4 percent target. The 10-month average also remains at 3.3 percent. I can now confidently say that the full-year inflation figure will be within the BSP’s 2-4 percent target band,” he said in a statement.
Salceda credited President Ferdinand R. Marcos Jr.’s recent rice tariff reduction policy as a significant factor in stabilizing prices for consumers while keeping farm incomes intact.
Executive Order 62, which lowered the tariffs on imported rice from 35 percent to 15 percent, was implemented on July 5.
“All-in-all, President Marcos’s policy of reducing rice tariffs by more than half seems to have produced positive results, while keeping farmgate prices high for farmers,” Salceda said.
He noted that average farmgate prices for rice have increased by 32 percent this year, from P18.72 to P24.70 per kilogram.
“The difference… seems to have come from the tariff reduction,” Salceda added.
He highlighted other positive developments in food prices, noting declines in poultry and meat.
“Poultry meat prices continue to decline and have lost as much as P27 from their prices last month,” Salceda said, adding that fish prices are also stable, with a year-on-year inflation rate of -0.4 percent.
Despite some pressure from high corn prices, which may limit further reductions in meat costs, Salceda viewed the inflation data as largely steady, describing it as a “return to the ‘boring’ monthly reports where nothing sticks out of the ordinary.”
Salceda said current tariff policies have “already been priced in,” and emphasized the need for structural agricultural improvements, such as better yields, reduced input costs, and more efficient logistics, to achieve further price stability.*PNA