Inflation Possibly Hit Over 7% Back in September

According to the Bangko Sentral ng Pilipinas (BSP), inflation might have risen to more than 7% in September in light of the depreciation of the peso against the dollar and the increase in food prices and electricity rates.

In August, the inflation rate eased to 6.3% from a previous 6.4% in July. The BSP says that the September inflation is ranging from 6.6 to 7.4%.

“Inflation for the month is expected to be driven by the increase in electricity rates and prices of key food commodities, as well as by the depreciation of the peso,” says the BSP.

The BSP also says that the inflation risks were offset by the decrease in local meat and fuel prices.

“Looking ahead, the BSP will continue to closely monitor emerging price developments to enable timely intervention to prevent the further broadening of price pressures, in accordance with the BSP’s price stability mandate,”  they said.

From January to September, inflation rates averaged around 4.9%. This number exceeded the 2-4% range of the BSP.

Last September 22, in their rate-setting meeting, the BSP increased its inflation forecast to 5.6% from a previous 5.4% and to 4.1% from 4% for 2023.

To stabilize the peso and lessen the effects of inflation, BSP has delivered a 225-basis point rate hike that made the benchmark interest rate climb to 4.25% from a record-low of 2%.

Economists predict that rates will further increase by the end of the year due to the weakening peso and fast inflation.

With the continued strength of the dollar, the peso reached a record low of  ₱58.99 to $1.

Source: Philstar