Headline inflation in the Philippines will likely ease to 2.5 percent in September from 3.3 percent in August due to lower rice tariff rates during the month, Finance Secretary Ralph Recto said on Tuesday, September 24.
The Finance Secretary made the forecast in a Palace briefing as the Philippine Statistics Authority will release the September inflation figures on October 4.
Recto also said headline inflation could settle at 3.4 percent this year, within the central bank’s 2 percent to 4 percent target range.
However, Recto acknowledged that some challenges could hinder efforts to lower the inflation rate, especially a conflict in the Middle East and fluctuations in global oil prices and higher electricity rates in the country.
“I think we’re on track with regard to the inflation target for September. But our biggest challenge really is external headwinds — the war in the Middle East, which we don’t want that to go out of hand, and possibly oil price increases which we have no control over,” Recto said.
“There is a pressure also, the electricity rates to go up but the President has decided to spread that out to roughly 36 months ‘no para hindi masyadong tumaas din iyong inflation rate o iyong binabayaran ng consumer natin sa electricity. So, I think everything is manageable,” Recto added.
Recto stated that the government has implemented several social programs aimed at helping Filipinos manage the impact of inflation.
When asked if rising prices could be expected as Christmas nears, Recto acknowledged that seasonal fluctuations are common, especially during the fourth quarter.
The DOF Secretary emphasized the broader economic benefits of lowering inflation, noting that as inflation decreases, economic growth tends to rise, leading to job creation and reduced borrowing costs.
With expectations of lower borrowing costs, Recto reassured the public that not only would government expenses decrease, but the cost of credit for the average Filipino, such as credit card interest rates, is also likely to decline as the festive season approaches. (TCSP)
