Headline inflation in September increased to 2.3 percent year-on-year from 1.8 percent in the previous month and was within the BSP’s forecast of 1.6-2.4 percent for the month. The resulting year-to-date average inflation rate of 1.6 percent was still below the Government’s inflation target range of 3.0 percent ± 1.0 percentage point for 2016. Likewise, core inflation, which excludes certain volatile food and energy items to measure underlying price pressures, rose to 2.3 percent in September from 2.0 percent in August. Meanwhile, month-on-month seasonally-adjusted headline inflation was unchanged at 0.1 percent in September.
The uptick in inflation for September was traced mainly to higher price increases in key food items particularly fish, fruit, as well as oils and fats. Rice prices were also higher due to the ongoing lean season while vegetable prices were pushed up by tightness in domestic supply owing to weather-related production disruptions. At the same time, upward price adjustments of selected domestic petroleum products also contributed to higher non-food inflation.
Officer-In-Charge Nestor A. Espenilla, Jr. noted that the latest inflation outturn continues to be consistent with the BSP’s assessment that inflation will gradually move towards the target range over the policy horizon. Looking ahead, the BSP will continue to monitor evolving inflation outlook and domestic demand conditions to ensure that the monetary policy stance remains in line with price and financial stability.