Get 40% Off
🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

Philippines inflation rate quickens for second month on rice gains

Published 10/04/2023, 09:13 PM
Updated 10/04/2023, 11:05 PM
© Reuters. FILE PHOTO: Onions are displayed at a stall at a public market in Manila, Philippines, January 28, 2023. REUTERS/Lisa Marie David/File Photo

By Neil Jerome Morales and Mikhail Flores

MANILA (Reuters) -Consumer prices in the Philippines rose for a second month in September, increasing the pressure on the central bank to resume raising interest rates.

A double-digit gain in the price of rice drove annual inflation to accelerate by 6.1% last month, its fastest pace in four months, according to data from the Philippine Statistics Authority released on Thursday.

That was higher than August's 5.3% rate and above the 5.3% forecast in a Reuters poll. The increase will make the central bank's 2%-4% target for the year harder to reach.

The country's economic planning agency on Thursday said it would recommend extending the lowered tariff rates on rice until December 2024, a day after Philippine President Ferdinand Marcos Jr lifted the cap on rice prices.

With the supply of rice adequate, Marcos has pinned the blame on the increase in the cost of the national staple on hoarders, smugglers and price manipulators.

Rice inflation quickened by 17.9% in September, the fastest in over 14 years, the statistics authority said, helping fuel the 10.0% food inflation rate for the month.

The Philippines saw some slight moderation in underlying price pressures, with core inflation, which doesn't include volatile food and energy prices, easing to 5.9% in September from 6.1% in August.

September's faster-than-expected inflation could convince the Bangko Sentral ng Pilipinas (BSP) to resume hiking rates after it left its benchmark rate steady at its last two meetings.

© Reuters. FILE PHOTO: Onions are displayed at a stall at a public market in Manila, Philippines, January 28, 2023. REUTERS/Lisa Marie David/File Photo

"This data point and the shift in the inflation path likely prompts one or two (rate hikes) this year although we feel the timing might be more tied to a potential, if it happens, Fed hike in early November," ING Economist Nicholas Mapa said.

Last month's inflation print brought year-to-date average inflation to 6.6%.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.