MANILA - Philippine inflation slowed to a four-month low in September government data released on Tuesday showed, driven by lower food and non-alcoholic beverage prices.
The consumer price index rose at a slower annual pace of 2.3 percent in September, according to data from the Philippine Statistics Authority, within the government's 2 to 4 percent target range.
Core inflation, which strips out volatile food and fuel items, came in at 3.2 percent.
The Bangko Sentral ng Pilipinas projected September inflation to settle within the 1.8 to 2.6 percent range.
"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 due largely to the impact on domestic and global economic activity of possible deeper economic disruptions caused by the pandemic," the Bangko Sentral ng Pilipinas said in a statement.
Prices of pork and chicken meat as well as the prices of milk, cheese and egg also contributed to the decline, Mapa said. Cigarette prices also posted a slower movement for the month, data showed.
Transportation is a major contributor to the headline inflation, the PSA said.
“The fact that inflation is at the lower end of the BSP’s target. That’s a good thing. It helps preserve purchasing power for those of us who are struggling in this economic recession,” ING Bank Philippines senior economist Nicholas Mapa said.
“Yes, it’s good the fact that it does preserve purchasing power but at the same time, it also shows that the economy is really struggling at this moment and we are in recession and we’re expected to remain in recession for the next few quarters,” he added.
Mapa said the Philippines could remain in recession in the next few quarters.
BSP Gov. Benjamin Diokno said Monday the fourth quarter could be "much, much better" as restrictions further ease.
The Department of Trade and Industry earlier allowed some industries to operate at full capacity in areas under general community quarantine to boost recovery.
Salons and barbershops were allowed to operate up to 75 percent while dine-in, take out and drive-thru are now allowed 24/7, it said.
Metro Manila and several areas remain under GCQ until Oct. 31.
-- with a report from Reuters