Recto Pleased With Inflation Rate Data

Finance Secretary Ralph G. Recto welcomed the sharp drop in the country’s inflation rate to 1.9 percent in September 2024––the lowest in four years––and vowed to intensify whole-of-government efforts to keep prices affordable, ensuring a joyful Christmas celebration for all Filipinos.

The headline inflation rate in September 2024 was the lowest since May 2020 and well below the 3.3 percent recorded in August 2024 and 6.1 percent in September 2023. I Photo: Department of Finance Facebook

“Napakagandang balita po ito para sa mga Pilipino. Patuloy nang bumababa ang presyo ng mga bilihin at hindi titigil ang gobyerno sa paggawa ng mga ito mas abot-kaya lalo na sa paparating na Pasko,” the Finance Chief said.

The headline inflation rate in September 2024 was the lowest since May 2020 and well below the 3.3 percent recorded in August 2024 and 6.1 percent in September 2023.

It also surpassed expectations, falling below the median estimate of 2.5 percent from private sector analysts and the Bangko Sentral ng Pilipinas’ (BSP) forecast of 2.0 percent to 2.8 percent.

This brought the year-to-date inflation rate to 3.4 percent, well within the government’s target band of 3 percent to 4 percent.

“With the better-than-expected inflation outcome for September, we expect the full-year rate to settle at around 3.2 percent. This gives the BSP more room to be aggressive in its monetary policy easing to help the economy grow at a faster rate and support the government in increasing its revenue collections,” Secretary Recto said.

The sharp reduction in September’s inflation was primarily due to slower increases in the prices of food and non-alcoholic beverages, which accounted for 69.1 percent of the decline, along with transport (14.6 percent) and housing, water, electricity, gas, and other fuels (9.4 percent).

Food and non-alcoholic beverages also drove the deceleration of inflation for the bottom 30 percent of households, with inflation significantly falling to 2.5 percent in September. These items accounted for a sizable 88.7 percent of the decrease.

The reduction in overall food inflation was due to a slower increase in the price of rice, which rose by 5.7 percent in September compared to 14.7 percent in the previous month––the lowest rate recorded in over a year.

This was a result of the implementation of Executive Order (EO) No. 62, which lowered the tariff on imported rice in July 2024. This led to a further increase in the volume of rice imports to 177,000 metric tons (TMT) in September, up by 42.6 percent from June.

The decline in retail rice prices is expected to become more pronounced in the coming months following India’s decision to lift its export ban on non-basmati white rice, and as retailers deplete their inventories purchased at higher prices before the tariff reduction.