Tamer inflation seen in September — DoF
‘For September, our expectation is roughly 2.5 percent; it’s a range between 2.1 [and] 2.9, with the midpoint at roughly 2.5’
Daily Tribune‘For September, our expectation is roughly 2.5 percent; it’s a range between 2.1 [and] 2.9, with the midpoint at roughly 2.5’
Finance Secretary Ralph Recto (center, seated) assured the public that inflation is on a downward trajectory and will remain manageable for the rest of the year as government interventions take full effect, during a press briefing in Malacañang Palace on Tuesday. Also answering questions from the members of the media was Agriculture Secretary Francis Tiu Laurel, moderated by press briefer Daphne Oseña-Paez.
PHOTOGRAPH COURTESY OF DoF
Finance Secretary Ralph Recto is pegging this month’s inflation rate at 2.5 percent, tamer than the 3.3 percent August rate.
“For September, our expectation is roughly 2.5 percent. It’s a range between 2.1 [and] 2.9, the midpoint is roughly 2.5,’’ Recto said at a Palace press briefing on Tuesday.
Further, he said he is confident that the country would meet the target for inflation this month.
However, the Finance chief stressed that inflation could spike in the fourth quarter, “but still within the range of 3.1 percent to 3.9 percent.”
Last August’s 3.3 percent rate versus July’s 4.4 percent, was attributable to slower increases in food and transportation costs, according to National Statistician and Philippine Statistics Authority chief Claire Dennis Mapa.
National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan, meanwhile, said that the sustained easing of inflation would support growth in household consumption, adding that low-income households will benefit from the decline in food inflation.
Reduced tariff on imported rice
He said the reduced tariffs on imported rice were also one of the reasons why there is a continued downward trend in inflation in the country.
Given this, there are still some potential pressures that could emerge affecting the inflation to fluctuate, namely higher electricity rates as well as above-normal weather disturbances.
Meanwhile, Recto also said the Monetary Board, where he sits as chairperson, can afford to slash interest rates further to 50 percent, equaling the size of the US Federal Reserve’s rate cut.
“The Fed reduced by 50 basis points. I think we can also do half a percent,” Recto said.
Rizal Commercial Banking Corporation chief economist Michael Ricafort, for his part, estimates September inflation at 2.6 percent year-on-year.
He said the easing trend in inflation could continue and even accelerate amid higher base/denominator effects a year ago that would mathematically result in slower year-on-year inflation, largely due to the lower tariffs on imported rice since early July 2024 with more imported rice at lower tariffs and lower world rice prices coming into the country for the coming months.
Lower global commodity prices
“Also, this was due to lower global commodity prices especially food and crude oil/energy (mostly the lowest in 3-4 years recently that could help inflation towards the target of central banks) amid the risk of recession in the United States (US) as a result of Fed rate hikes since 2022 and mostly softer economic data in China, as well as stronger peso exchange rate versus the US dollar, which is among the strongest for the peso in about six months, lowering import costs and overall inflation, despite higher prices/inflation on utilities/electricity,” he said.
For the coming months, Ricafort forecasted a possibility for inflation to be sustained at three percent levels for the rest of 2024, or well within the Bangko Sentral ng Pilipinas inflation target range of two to four percent, also for the remaining months of 2024, which could justify further BSP rate cuts that would match any future Fed rate cuts from 2024-2026, maintaining the narrow interest rate differential of 0.75-1.00 to prioritize and optimize monetary easing and spur faster economic growth and development, as a policy priority.
