Inflation will likely settle at 2.1 percent in September, which is higher than the 1.5 percent recorded in August this year.
The forecast, however, is within the 2 to 4 percent inflation target of the Bangko Sentral ng Pilipinas (BSP).
Rizal Commercial Banking Corporation chief economist said the volatility in global crude oil prices due to increased tensions in the Middle East and other geopolitical uncertainties, as well as the impact of storm damage could lead to some transitory increase in food prices.
He said the government also banned rice imports from September to October 2025 to protect the incomes of local farmers in view of the seasonal increase in local palay (unhusked rice) harvests.
“However, this could lead to some upward correction in local rice prices,” Ricafort said.
He added that the latest P50 increase in Metro Manila minimum wage as well as in other regions could also lead to some pickup in the prices of affected goods and services in the coming months.
Ricafort, however, noted that despite the possible increase in rice prices, inflation will remain within the BSP’s target.
“Inflation could remain relatively benign and still below the BSP’s inflation target of 2 percent to 4 percent, largely due to still relatively lower rice prices, which account for 9 percent of the CPI (consumer price index) basket due to lower tariff on imported rice to 15 percent from 35 or an outright discount of 20 percent and also due to lower world rice prices recently,” he said.
“Furthermore, world rice prices declined to new 5-year lows or since August 2020 in recent months, down from 15-year highs seen from July 2023-July 2024 with the end of El Niño drought in June 2024,” Ricafort added.
PNA PHOTO