September inflation slightly slowed down to 4.8%

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THE inflation rate slightly decelerated in September 2021 to 4.8 percent from 4.9 percent in August 2021, the Philippine Statistics Authority (PSA) said Tuesday, Oct. 5, 2021.

This is at the lower end of the Bangko Sentral ng Pilipinas’ (BSP) forecast range of 4.8 to 5.6 percent for September 2021.

Food inflation decreased to 6.5 percent in September from 6.9 percent in August, due to slower inflation rates in rice, fish and meat. Rice inflation recorded zero growth, following the issuance of Executive Order 135. Likewise, fish inflation decelerated to 10.2 percent from 12.4 percent.

Meanwhile, meat inflation decreased to 15.6 percent from 16.4 percent, as pork inflation declined to 36.4 percent from 39 percent. Moreover, month-on-month meat inflation continued to decline at 1.6 percent, suggesting some price stabilization following the implementation of EOs 133 and 134.

“The proactive implementation of EOs 133 and 134 have helped stabilize pork prices. The government is continuously accelerating and calibrating its implementation so we can further lower pork prices towards their pre-African swine fever (ASF) level,” Socioeconomic Planning Secretary Karl Kendrick Chua said, in a statement.

The government adopted EOs 133 and 134 in May 2021 to help increase the supply of pork in the country amid its shortage due to the African Swine Fever. These interventions increased the minimum access volume (MAV) for imported pork and imposed a temporary reduction of pork tariffs, respectively.

BSP Gov. Benjamin Diokno said “inflation could remain elevated in the near term before decelerating to within the target range of two to four percent by the end of the year.”

“Inflation is projected to settle close to the midpoint of the target range in 2022 and 2023 with inflation expectations remaining firmly anchored to the target.

The recent slower inflation was mainly due to lower annual rate of increase in transport index,” the BSP chief said in a tweet.

Risks

The risks to the inflation outlook, according to Diokno, remain tilted towards the upside for the remaining months of 2021, but remain broadly balanced for 2022 and 2023.

“Upside risks may come from pressures on world commodity prices, effects of weather disturbances, and prolonged recovery from the ASF outbreak,” he said.

“On the other hand, downside risks are seen from the spread of more contagious Covid-19 variants and weaker-than-expected global growth prospects.

Excluding selected food and energy indices, core inflation remained at 3.3 percent,” he added.

Meanwhile, to expedite the utilization of the additional MAV, Neda recommended to reduce restrictions in the MAV plus so that imported pork can be sold in more areas and to unload more pork stocks in cold storages to the markets.

The average stocks of frozen pork in September (week one to week three) increased to 79,042 metric tons (MT) from 73,159 MT in August 2021. The timely release of pork stocks will help address the supply gap and bring down pork

prices.

On the other hand, to help augment the fish supply in the coming closed fishing season, the Department of Agriculture issued a Certificate of Necessity to Import (CNI) with a maximum importable volume of 60,000 MT of small pelagic fish such as galunggong, mackerel and bonito for wet markets. The government will proactively monitor the supply and demand of fish and immediately issue supplemental CNIs as necessary.

Neda said to cover the expected supply gap during the upcoming closed fishing season, the government will temporarily allow more imports in the fourth quarter of 2021 and the first quarter of 2022.

“The government will continue to proactively monitor the supply and demand of these commodities to ensure access to affordable food amid the pandemic,” Chua said. (KOC with PR)

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