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September Inflation Accelerates Slightly


Headline inflation rose year-on-year to 4.6 percent in September from 4.3 percent in August using the 2000-based Consumer Price Index (CPI) series. Using the 2006-based CPI series, headline inflation also inched up to 4.8 percent in September from 4.7 percent in August. The year-to-date averages of 4.3 percent using the 2000-based basket and 4.8 percent using the 2006-based basket are both within the Government's inflation target range of 3-5 percent for 2011 and the BSP's monthly forecast of 3.8-4.8 percent.  Core inflation, which excludes certain food and energy items to measure generalized price pressures, likewise went up to 3.5 percent in September from 3.4 percent in the previous month based on the 2000-based CPI series. On a month-on-month basis, headline inflation was also higher at 0.1 percent and 0.2 percent in September using the 2000-based and 2006-based baskets, respectively, compared to zero and 0.1 percent in August. 

Based on the 2006-based CPI series, the uptick in September inflation was due mainly to higher prices of food, notably fruits and vegetables. Tight supply conditions, triggered by weather-related production disruptions, led to higher retail prices of these food items during the month. 

Governor Amando M. Tetangco, Jr. noted that the factors that drove inflation higher in September were mainly supply-side in origin. With the weaker outlook for the global economy, which could dampen commodity price pressures, and with well-behaved inflation expectations, inflation outturns going forward are expected to remain in line with the Government's target. He emphasized that the BSP continues to keep a close watch over price and output developments in both domestic and global levels, and ensure that the stance of monetary policy remains appropriate. .

View Table 1  |  Table 2

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