Year-on-year headline inflation in the Philippines eased to 2.3 per cent in September from 2.4 per cent in the previous month and was within the central bank’s expected range of 1.8-2.6 percent for the month, data from the Bangko Sentral ng Pilipinas (BSP) showed.

The resulting year-to-date average inflation rate of 2.5 per cent was within the Government’s target range of 3.0 per cent ± 1.0 percentage point for the year.

By contrast, core inflation—which excludes selected volatile food and energy items to measure underlying price pressures—rose to 3.2 per cent year-on-year in September from 3.1 per cent in August. Meanwhile, month-on-month seasonally-adjusted inflation was nil in September from -0.2 per cent in the previous month.

Overall inflation eased further due mainly to the deceleration in food and non-alcoholic beverages inflation. The lower food inflation can be traced to slower price increases of meat, milk, cheese, and eggs as well as the continued decline in vegetable prices in September.

In addition, year-on-year inflation for alcoholic beverages and tobacco moderated but remained at double-digit rates. By contrast, non-food inflation increased in September owing to higher inflation for transport services and education.

The latest inflation outturn is consistent with the BSP’s prevailing assessment that inflation is expected to remain benign over the policy horizon, with the balance of risks tilting toward the downside owing mainly to potentially deeper disruptions to domestic and global economic activity amid the pandemic.

Moving forward, the BSP remains watchful over price and output developments and stands ready to take policy actions as needed to ensure price stability conducive to sustainable economic growth. –