Philippine inflation hits 7.2% in September, fastest in three-and-a-half years
Philippine headline inflation accelerated to 7.2% in September, its fastest pace since March 2023, driven by food supply disruptions, higher global oil prices and rising transport and utility costs. The rate matched the Bangko Sentral ng Pilipinas' upper estimate and ended four months of deceleratio
Philippine headline inflation quickened to its fastest pace in over three years, accelerating to 7.2% in September from 6.1% in August and 1.7% a year earlier, the Philippine Statistics Authority (PSA) said on Tuesday. The figure matched the April clip and was the fastest since the 7.6% recorded in March 2023, though it remained within the Bangko Sentral ng Pilipinas' (BSP) 6.4% to 7.4% estimate. September ended four months of deceleration and surpassed the 6.7% median estimate of 22 analysts polled by BusinessWorld.
"September's inflation rise was driven mainly by disruptions in food supply caused by adverse weather and higher global oil prices," said Department of Economy, Planning, and Development Secretary Arsenio M. Balisacan. National Statistician Claire Dennis S. Mapa attributed the acceleration to faster price increases in food, transport and utilities. Food and non-alcoholic beverages inflation rose to 6.7% from 4.6%, the fastest since October 2023. Vegetable inflation surged to 10.7% from -3.4% in August, while rice inflation hit a two-year high of 20.3%.
Transport inflation came in at 14.6% in September, up from 13.5% in August, as gasoline and diesel posted faster annual increases of 40.9% and 61.3% respectively. Fuel retailers raised pump prices for three consecutive weeks as global oil prices rose amid the re-escalation of the Middle East conflict. Mr Mapa noted that the September transport data does not yet account for fare hikes for public utility vehicles implemented on 28 September. Utility costs also rose, with inflation for housing, water, electricity, gas and other fuels picking up to 8.4% from 7.9%.
Core inflation, which excludes volatile food and energy items, quickened to 4.7% in September from 4.1% a month ago, the fastest since October 2023. Inflation for the bottom 30% of income households hit 9%, the highest since February 2023. The headline rate has been above the BSP's 3% target for seven consecutive months, bringing the average inflation to 5.4% for the year to date.
Economists warned of further acceleration. Bank of the Philippine Islands Lead Economist Emilio S. Neri Jr. said price pressures from fare and minimum wage increases could push inflation higher from October, potentially prompting the BSP to extend its tightening cycle into the first half of 2027. Chinabank Research said inflation may quicken further in the fourth quarter, peaking in November, with transport fare hikes contributing about 1.4 percentage points and the "Super El Niño" driving food and utility prices higher. Jonathan L. Ravelas of Reyes Tacandong & Co. said the September print opens the door for a 50-basis-point policy rate hike. The BSP has delivered 75 basis points in rate hikes since April, with its benchmark rate at 5%.
