Oct 042013

MANILA, Philippines – The nationwide inflation rate picked up more than expected in September on higher prices of food, non-alcoholic beverages and utilities. 

In a report, the National Statistics Office (NSO) said the consumer price index rose 2.7 percent in September from a year earlier, the fastest in three months and picking up from a four-year low hit in August.

Despite the acceleration, the latest figure is still within the Bangko Sentral ng Pilipinas’ forecast range of 1.9 to 2.8 percent for the month.

Without food and oil prices, core inflation went up to 2.3 percent in September from 1.9 percent in August.

“This reaffirms our assessment that inflation would remain manageable over the policy horizon, and that barring any unforeseen developments, policy settings continue to be appropriate,” BSP Governor Amando M. Tetangco Jr. said in a text message to reporters yesterday.

‘’The BSP will remain watchful of both local and global developments, including the impact of the resolution of the issues surrounding the US debt ceiling on financial market volatilities in the near term, and the real economy in the medium term,” he added.

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Tetangco said the central bank is ready to adjust policy settings in line with keeping prices stable.

“The BSP will adjust policy settings, as appropriate, consistent with our price and financial stability objectives,” Tetangco said.

Since the start of the year, the Monetary Board has kept overnight borrowing and lending rates at 3.5 percent and 5.5 percent, respectively. The central bank has cited the robust economic growth and well-anchored inflation as reasons for keeping the rates steady.

The National Capital Region recorded inflation of 1.1 percent in September, while areas outside the capital saw the rate quicken to 3.1 percent, the NSO said.

Looking at each commodity group, the prices of housing water, electricity, gas and other fuels rose faster at 1.1 percent in September from a decline of 0.3 percent in August.

The country also saw prices of food and non-alcoholic drinks climb faster at 2.5 percent from 1.8 percent, while the rise of prices for alcoholic drinks and tobacco products was 31.2 percent last month from 31 percent in August.

The inflation rate for health services also went up to 2.7 percent from 2.6 percent.

But the rise in prices of transportation services decelerated to 0.6 percent in September from 1.0 percent in August, as the increase in the prices of clothing and footwear was relatively stable at 2.9 percent from 3 percent.

The  inflation rate for furnishing and household items was also stable at 2.3 percent from 2.4 percent in the previous month, while the rate for communication services remained stable in September.

Bank of the Philippine Islands’   Economics and Financial Markets Research said it expects the BSP to maintain its policy rates despite the rising inflation rate.

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