MANILA, Oct 6 — Philippine inflation slowed to a four-month low in September, reflecting weak domestic demand, but the central bank said its policy-easing and liquidity-enhancing measures were sufficient to support the pandemic-hit economy.
The Consumer Price Index rose 2.3 per cent in September from a year earlier, slightly slower than the 2.4 per cent inflation in August as price pressures eased on the heavily weighted food and non-alcoholic beverage index, the Philippine Statistic Authority said on Tuesday.
The headline figure was below the 2.4 per cent median forecast in a Reuters’ poll, but within the central bank’s forecast range of 1.8 per cent-2.6 per cent for the month.
Core inflation, which excludes volatile food and fuel prices, was 3.2 per cent, versus 3.1 per cent in August.
Inflation in January-September averaged 2.5 per cent, below the mid-point of the official 2 per cent-4 per cent target range for the year.
It is likely to be around 2.4 per cent-2.5 per cent in the last three months of the year, said chief statistician Dennis Mapa.
Economists largely expect consumer price pressures to stay muted in the last quarter as pandemic restrictions are unlikely to be fully lifted in a country with the highest tally of coronavirus cases in Southeast Asia.
Despite tame inflation, however, some economists do not expect further interest rate cuts for the rest of the year after the central bank slashed rates by a total of 175 basis points between February and June.
The Bangko Sentral ng Pilipinas (BSP), which kept its benchmark interest rate steady at a record-low 2.25 per cent for a second successive meeting on Thursday, has scaled down its inflation forecasts for 2020 and the next two years.
“The significant monetary easing and liquidity enhancing measures done by the BSP and the timely implementation of fiscal measures…are seen to provide sufficient support to economic recovery,” BSP Governor Benjamin Diokno said after the release of the inflation data.
— Reuters
