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BusinessMirror A broader look at today’s business Saturday, October 5, 2024 Vol. 19 No. 354
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SURPRISE: INFLATION IN SEPT AT 1.9%, A 4-YR LOW www.businessmirror.com.ph
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PBBM’S PITCHES FOR ASEAN MEET IN LAOS: RE, DIGITAL ECONOMY, MSME SUPPORT
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By Cai U. Ordinario
HEAPER food items may continue to sustain the country’s low inflation rate in the coming months, according to local economists. On Friday, the Philippine Statistics Authority (PSA) disclosed that the country’s inflation rate averaged 1.9 percent in September, the lowest in four years or since the 1.6 percent posted in May 2020. The inflation recorded by food and non-alcoholic beverages slowed to 1.4 percent in September 2024. This commodity group posted an inflation rate of 3.9 percent in August 2024.
“For the next few months, yes [inflation will be sustainable] because of easing of food prices,” Philippine Institute for Development Studies Senior Research Fellow Roehlano Briones told the BusinessMirror. National Statistician Claire Dennis S. Mapa said the slowdown in inflation was driven by cheaper food and non-alcoholic beverages, which accounted for 69.1 percent
Socioeconomic Planning Secretary Arsenio M. Balisacan: “Easing food prices will relieve low-income households, enabling them to allocate more to other essential needs such as education and health. We will sustain the momentum as we assure the public that we will continue to pursue and carry out strategies to maintain stable prices of food and other commodities.”
of the downtrend. Rice prices alone only posted an inflation rate of 5.7 percent, the slowest since the 4.2 percent posted in July 2023. Briones noted that the decision of India to relax its export restrictions on rice can be a major factor in the slowdown in rice prices in the global market. Bank of the Philippine Islands Chief Economist Emilio S. Neri Jr. told the BusinessMirror that rice prices in major rice producers such as Vietnam and Thailand have also been lower for the past three months. “Rice can be a negative contributor to headline inflation in the next 12 months as domestic production improves on better weather and if global price benchmarks continue to fall,” Neri said. Continued on A2
DOF sees full-year inflation at 3.2%, sees sharp rate cut By Reine Juvierre S. Alberto
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HE Department of Finance (DOF) expects the full-year inflation rate to settle at around 3.2 percent in 2024, allowing the Bangko Sentral ng Pilipinas (BSP) to cut key policy rates aggressively. In a statement on Friday, Finance Secretary Ralph G. Recto, who also sits as a member of the Monetary Board, welcomed the sharp drop in the country’s inflation rate to 1.9 percent in September 2024. “With the better-than-expected inflation outcome for September, we expect the full-year rate to settle at around 3.2 [percent]. This gives the BSP more room to be aggressive in its monetary policy easing to help the economy grow at a faster rate and support the government in increasing its revenue collections,” Recto said. Earlier, Recto said the BSP could match the US Federal Reserve’s rate cut, by reducing local interest rates further by 50 basis
points for the rest of 2024. The Monetary Board reduced interest rates on August 15. BSP Governor Eli M. Remolona Jr. said the Monetary Board will make another 25-bps rate cut either in its October or December meeting this year. The headline inflation rate in September 2024 was the lowest in four years or since May 2020. It is also lower than the 3.3 percent recorded in August 2024 and 6.1 percent in September 2023. The inflation outturn also fell below the median estimates of 2.5 percent from private analysts and the BSP’s forecast range of 2.0 percent to 2.8 percent. The year-to-date inflation rate of 3.4 percent settled between the government’s target band of 3 percent and 4 percent. Meanwhile, Recto also promised a “joyful” Christmas for Filipinos by keeping prices affordable through an intensified whole-ofgovernment approach. “Napakagandang balita po ito para sa mga Pilipino. Patuloy nang
Finance Secretary Ralph G. Recto: “Napakagandang balita po ito para sa mga Pilipino. Patuloy nang bumababa ang presyo ng mga bilihin at hindi titigil ang gobyerno na gawing mas abot-kaya ang mga ito lalo na sa paparating na Pasko.”
bumababa ang presyo ng mga bilihin at hindi titigil ang gobyerno na gawing mas abot-kaya ang mga ito lalo na sa paparating na Pasko [This is good news for the Filipinos. Prices are going down, and the government will not stop in making these goods more affordable this holiday season],” Recto added.
The slower increases in food and non-alcoholic beverages, contributing 69.1 percent of the decline; transport (14.6 percent); and housing, water, electricity, gas and other fuels (9.4 percent) caused the inflation rate to ease in September. For the bottom 30 percent of households, food and non-alcoholic beverages were the largest factor in the inflation drop, accounting for 88.7 percent of the deceleration. Rice inflation went down to 5.7 percent in September from 14.7 percent in August on the back of lowered rice tariffs after the implementation of Executive Order (EO) No. 62. Lower rice inflation, the lowest rate recorded in over a year, drove the reduction in the overall food inflation in September. Retail rice prices are expected to decline in the coming months after India’s decision to lift the export ban on non-basmati white rice and as retailers deplete their inventories bought at higher prices—before the tariff reduction.
[FILE] President Ferdinand Marcos Jr. attends a session of the Asean-Japan Commemorative Summit Meeting at the Hotel Okura Tokyo in Tokyo, December 17, 2023. KAZUHIRO NOGI/POOL PHOTO VIA AP
By Samuel P. Medenilla
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RESIDENT Ferdinand Marcos Jr. will push for strengthening the digital economy, support for Micro, Small and Medium Enterprises (MSMEs) and promotion of renewable energy during the 44th and 45th Association of Southeast Asian Nations (Asean) Summit and Related Summits in Lao People’s Democratic Republic (PDR) next week. The chief executive is also expected to meet with several multinational firms, including social-media giant TikTok, as he seeks to attract more investments in the country during the sidelines of the summit from October 9 to 11, 2024, in Vientiane, Lao PDR. In a press briefing in Malacañang on Friday, Department of Foreign Affairs (DFA) Assistant Secretary Daniel R. Espiritu disclosed the President will be participating in 16 leaders-led engagements in the three-day Asean Summit. This includes the Interparliamentary Assembly interface, where the President will be joined by House Speaker Ferdinand Martin G. Romualdez and Rep. Glona Labadlabad of Zamboanga. For the Asean Business Advisory Council, Marcos will be accompanied by Acting Secretary of Trade Cristina Aldeguer-Roque and business leaders Joey Concepcion III, George Barcelon and Michael Tan. Continued on A2
EJAP-ABOITIZ FORUM
Energy Secretary Raphael Lotilla addresses the EJAP (Economic Journalists Association of the Philippines)-Aboitiz Power Corp. forum in Makati City on Friday. He said baseload power facilities that are exempted from the coal moratorium can secure financing at more favorable terms if a certification from the government is secured. At the same forum, Trade and Industry officials reported on the progress of the green-lane certifications for projects, now worth a total of over P4 trillion. Stories in A3 News. PHOTO COURTESY OF DEPARTMENT OF ENERGY
PESO EXCHANGE RATES n US 56.2650 n JAPAN 0.3832 n UK 73.8816 n HK 7.2469 n CHINA 8.0251 n SINGAPORE 43.4077 n AUSTRALIA 38.4853 n EU 62.0772 n KOREA 0.0422 n SAUDI ARABIA 14.9884 Source: BSP (October 4, 2024)