Philippines inflation quickens in September, opens door to further rate hike

PHILIPPINE inflation quickened for a second straight month in September due to increases in food and transport costs, the statistics agency said on Thursday, opening the door to further central bank interest rate hikes.

The consumer price index rose to 6.1 per cent in September, blowing past the 5.3 per cent forecast in a Reuters poll, and hit the top end of the central bank’s 5.3 per cent to 6.1 per cent projection for the month.

That brought year-to-date average inflation to 6.6 per cent, still outside the central bank’s 2 per cent to 4 per cent target for the year.

Core inflation, which strips out volatile food and fuel items, eased to 5.9 per cent from 6.1 per cent in August.

Ahead of Thursday’s data, Philippine President Ferdinand Marcos Jr lifted a cap on the price of rice, the staple in a country dependent on imports of the grain.

ING Economist Nicholas Mapa said on platform X the central bank would hike rates further in the near term after inflation surpassed expectations.

SEE ALSO

Philippines’ Marcos removes month-long cap on rice prices

Amro cuts 2023 growth forecast for Asean+3 on China’s Q2 weakness, maintains 2024 projection

IMF cuts Philippines growth outlook to 5.3% for this year

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The central bank, which next meets on Nov 16, has kept interest rates steady at its last two meetings, but left the door open to further rate hikes to bring inflation back to its target for the year.

The economic planning agency on Thursday said it would recommend extending the lowered tariff rates on rice until December 2024. REUTERS