The overall inflation rate recorded in September 2020 remains low and stable but some upside risks remain, the National Economic and Development Authority (NEDA) said.
The country’s overall inflation slightly eased to 2.3 percent in September 2020 from 2.4 percent in the preceding month, which brings the year-to-date inflation to 2.5 percent.
“Due to stable supply, free movement of goods, and recent structural reforms, inflation in September was well below the midpoint of the central bank target at 3 percent,” acting Socioeconomic Planning Secretary Karl Kendrick Chua said in a statement on Wednesday.
The inflation figure for September was lower than the 2.4-percent inflation rate in August, but higher than the 0.9 percent regsistered in September 2019.
For the first nine months of the year, inflation settled at 2.5 percent, which is within the government’s 2.0 to 4.0 percent target.
Inflation in the first eight months of this year averaged at 2.5 percent.
“The downtrend in the overall inflation in September 2020 was mainly caused by the slowdown in the inflation for the food and non-alcoholic beverages. This was due to the downtrend in the prices of eggplant and garlic, meat particularly chicken and pork, and milk, cheese, and eggs,” Philippine Statistics Agency head Dennis Claire Mapa said in a briefing also on Wednesday.
Effect of RTL
Chua said landmark reforms, such as the Rice Tariffication Law (RTL) of 2019, enabled the country to withstand supply shocks that could have otherwise threatened overall price stability.
However, the onset of La Niña, the continued presence of African swine fever in the country, the imposition of localized lockdowns, and supply chain bottlenecks could pose upside risks to the low inflation environment.
“Concerned government agencies and local government units also need to strengthen the implementation of its phytosanitary and biosecurity measures and intensify its meat inspection efforts. This is to suppress the spread of potentially contaminated meat products, as new cases of African swine fever and avian influenza are reported,” the NEDA chief said.
He said the government could also explore and expand projects that will improve the country’s water management systems, distribute climate-resilient seed varieties, provide post-harvest facilities, and ensure business continuity and delivery of goods across the country, as these will all be important sectors to address the potentially adverse effects of these risks.
New waves of coronavirus disease 2019 (Covid-19) cases around the world and slower than expected economic recovery continue to put downward pressures on global oil prices.
Despite this, Chua assured that the government is closely monitoring global price movements to remain ready to address any potential shocks.