Inflation Eased to 3.6 in September

Philippines annual inflation rate slowed in September, easing to 3.6 percent from 3.8 percent last August, raising the possibility that central bank would cut interest rates to support domestic economy following the rapid changes of the economic phenomenon. According to manila bulletin:

The National Statistics Office (NSO) reported slower annual gains in the clothing and footwear index; housing, water, electricity, gas and other fuels index; health index; and in the restaurant and miscellaneous goods and services index. Inflation a year ago was 4.7 percent.

Core inflation on the other hand, which consists of the more volatile elements including food and energy prices, eased to 3.8 percent in September from August’s 4.3 percent, while monthly inflation was down to 0.1 percent.

Moreover, National Capital Region’s (NCR) annual hikes in food and non-alcoholic beverages index; housing, water, electricity, gas, and other fuels index; and recreation and culture index is improved, which resulted to reduced inflation 3.5 percent in September from 4.4 percent in August.

However, annual inflation rate in other regions rose up to 3.7 percent in September from 3.6 percent in August.

Increasing inflation rates usually indicates slowing of economy as prices for foods, energy items, commodities, services rise and the currency weakens.

However, as the inflation rate decreases prices for foods, energy items, commodities and services will be rising at slower rates. And, it is good news if inflation falls because of increased productivity and better technology, which will absolutely benefit from both lower inflation and higher growth.

While, in Philippines condition, according to HSBC economist Trinh Nguyen from Philippine Star:

Inflation was pulled down by “weaker fuel prices.‚” While it is‚“good news,” Nguyen said BSP could keep rates steady throughout the year. “The easing of inflation is good news but not enough reason for the BSP to cut further, as rates are already accommodative enough to spur spending. The benign headline inflation reading means that the BSP has room to keep rates low for the rest of the year,” she explained.

Adjustment to the bank’s policy rate would depend whether the risk of inflation is increasing or the risk of economic growth is decreasing.

Whatever may be the result of the September inflation, all entrepreneurs with no exception of small and micro business owners, must be alert of the changes of our economy that may greatly affect your business.


You can leave a response, or trackback from your own site.

One Response to “Inflation Eased to 3.6 in September”

  1. […] to Protect Your Small Business During Inflation Janie Though the inflation rate inched down in September, but for other regions outside National Capital Region (NCR), still it […]

Leave a Reply

You must be logged in to post a comment.