September registers lowest inflation this year
Davao City (7 October) -- Prices of commodities remained stable, as September registered the lowest inflation this year.
According to the National Statistics Office (NSO), headline inflation for the month of September slowed to 3.5 percent year-on-year. From January to August, the monthly inflation rate ranged from 3.9 to 4.4 percent.
The average inflation from January to September this year is 4.1 percent, which is within the 3.5 to 5.5 percent target set by the government.
Socioeconomic Planning Secretary Cayetano W. Paderanga, Jr. said that the lower generation charges of electricity contributed to the benign September inflation.
"The fall in electricity prices by 4.4 percent in September relative to the previous month could have contributed greatly to the decline in September consumer prices," Paderanga said in his memorandum to President Benigno Simeon Aquino III.
Citing figures from the Manila Electric Company (MERALCO), Paderanga said that the generation charge in September was lower by PhP0.684 per kilowatt hour compared to August due to lower cost of purchases from the Wholesale Electricity Spot Market.
The Director-General of the National Economic and Development Authority (NEDA) also noted the significant decrease in the prices of rice, corn, meat, fruits and vegetables, and transportation and communication in September as major contributors to the low inflation rate.
Paderanga anticipates that the impact on inflation for the rest of the year will still be minimal even with the increasing price of wheat in the world market.
"The Technical Committee on Tariff and Related Matters (TCTRM) already endorsed to the Cabinet-level Committee on Tariff and Related Matters (CTRM) on September 30, 2010 a draft Executive Order that would extend the zero duty on milling (food) wheat for another six months. This will mitigate any drastic increase in the local prices of flour and bakery products, even those of substitutes, such as rice," Paderanga said.
While price adjustments in ASEAN countries have been stable this year, Paderanga said that central banks in the region continue to be vigilant in preventing undue rise in inflation.
"The Bank of Thailand increased its policy rate by 25 basis points in August since it expected inflation to rise next year with economic expansion and rising costs of production. Likewise, Bank Negara Malaysia increased its policy rates by 25 basis points in July on the expectation
that prices will rise together with continued improvement in domestic economic conditions and possible adjustments in administered prices. The Monetary Authority of Singapore also imposed a tighter monetary policy, but the Bank of Indonesia and the Bangko Sentral ng Pilipinas continued to maintain their policy rate levels since lowering them in the midst of the global economic crisis," Paderanga said.
The annual inflation rates within and outside Metro Manila were also registered at 3.5 percent. Meanwhile, the core inflation, or price adjustments of commodities excluding selected food and energy items, slowed down as well to 3.8 percent in September 2010 from the previous month's 4.2 percent. (NEDA) [top]