Inflation spikes to 6.1% in September

Consumer prices surged last month due to the steep rise in food prices, particularly rice, and the spike in transportation costs caused by higher fuel prices, the Philippine Statistics Authority (PSA) reported.

In a briefing, National Statistician Claire Dennis S. Mapa said that headline inflation in September was 6.1 percent, surpassing the 5.3 percent in August but remained lower than the 6.9 percent recorded in the same month last year.

The actual rate falls within the upper range of the Bangko Sentral ng Pilipinas’ projected range of 5.3 percent to 6.1 percent.

From January to September, inflation rate was 6.6 percent, exceeding the government’s target range of two percent to four percent.

Mapa said the rising food prices pushed inflation rate to a second-month high, particularly cereal and cereal products with a 14.1 percent rate.

Rice falls under the cereal category, which contributed the most to food inflation last month at 17.9 percent. This is the highest since the 22.9 percent recorded in March 2009.

Despite the implementation of rice price cap in September, PSA said that over the 2,601 varieties of regular-milled rice they monitored, only 640 fell within the price cap range of P41 or below.

For well-milled rice, 3,498 varieties were monitored, and only 687 or 20 percent fell within the price cap range of P45 or less.

“Hindi natin masasabi yung causality kung meron talagang effect kung wala yung rice price cap [We cannot definitively establish causality if there is indeed an effect without implementing a rice price cap],” Mapa said.

Apart from rice, faster annual growth rate was also observed in fruits and nuts at 11.6 percent in September from 9.6 percent in the previous month.

Meanwhile, core inflation, excluding selected food and energy items, slightly shrinked to 5.9 percent in September 2023 from 6.1 percent in August. This was faster than the 5.0 percent recorded a year earlier.

Inflation in all regions in the country also went above target in September. Central Luzon (Region 3) and MIMAROPA Region, Northern Mindanao (Region 10), and Western Visayas (Region 6) posted the highest inflation rates among the regions.

Following the release of the latest inflation data, National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan said the government plans to temporarily lower rice tariffs if the global price of rice continues to rise due to El Niño and export bans in key exporting countries.

The Inter-Agency Committee on Inflation and Market Outlook also recommended extending the lower Most Favored Nation (MFN) tariff rate on rice under Executive Order No. 10.

“To address the increasing price of rice and ensure enough supply through timely and adequate importation, the IAC-IMO recommends extending the lower MFN tariff rate on rice until December 2024, but subject to review in July 2024,” Balisacan said.

“This policy response must be complemented by efforts to improve the predictability and transparency of issuing the Sanitary and Phytosanitary Import Clearance for rice and all commodities,” he added.

Earlier, President Marcos has lifted the temporary price ceiling on rice both for the regular milled rice and for the well milled rice. — Xander Dave Ceballos