BAD WEATHER continued to push up food and electricity prices in September, potentially bringing headline inflation back within he central bank’s target band, Metropolitan Bank Trust & Co. (Metrobank) said.
In a commentary on Monday, Metrobank said it expects inflation to pick up to 2.5% in September from 1.5% in August and 1.9% in September 2024.
If realized, September’s print would mark the first time in six months that inflation would have settled within the Bangko Sentral ng Pilipinas’ (BSP) 2-4% target range or since the 2.1% in February.
“Though rice inflation will remain in negative territory, food and energy will likely be the primary drivers of faster price growth for the month,” Metrobank said.
Metrobank said heavy rains and typhoons may have pushed up food prices, particularly vegetables and fish.
“Prices of vegetables and fish shot up significantly, with vegetable prices seeing a particularly dramatic rise compared with last year’s weaker price base. Meanwhile, the price of meat continued its upward trend, albeit at a slower pace,” it said.
However, the prices of fruits were “relatively stable” on a year-on-year basis, it added.
Metrobank said rice inflation will continue to soften, contrary to earlier projections, as record-high supply levels stabilized global prices.
“In the local space, rice prices also continue to drop amid the harvest season,” it added.
In August, rice inflation declined at a faster pace of -17% from -15.9% in July.
Agriculture Secretary Francisco P. Tiu Laurel, Jr. said on Monday that they have extended the rice import ban by 30 days and are looking to extend it until yearend amid falling farmgate prices of unmilled rice.
The 60-day suspension on regular milled and well-milled rice imports, which took effect on Sept. 1, was supposed to end on Nov. 2.
“Despite the ongoing import ban, sustained deflation in rice prices this month will continue to temper headline inflation,” Metrobank said.
Meanwhile, energy prices also likely drove inflation faster in September.
“While Meralco (Manila Electric Co.) electricity prices were lower month on month in September, rates remained elevated compared with last year. Visayas Electric and Davao Light also saw higher prices for the month, attributed to power plant outages across the country,” Metrobank said.
Meralco lowered electricity rates by P0.1852 per kilowatt-hour (kWh) in September, bringing the overall rate for a typical household to P13.0851 per kWh from P13.2703 per kWh a month ago.
Metrobank said the National Capital Region also saw an increase in pump prices of unleaded gasoline and diesel amid geopolitical tensions and dwindling supply.
The Philippine Statistics Authority is set to release September inflation data on Tuesday, Oct. 7. — Katherine K. Chan
