Is a second, stickier inflation wave taking shape?
MANILA, Philippines – Even after stripping out seasonal effects, inflation is steadily marching up, with price increases now spreading across most commodity groups and regions and several risks still not captured by the latest data.
Asked by Rappler whether the surge in September inflation could mark the beginning of a second, stickier inflation wave, National Statistician Dennis Mapa pointed to the seasonally adjusted figures, which showed month-on-month inflation accelerating to 1.1% in September from 0.5% in August.
“Even on the seasonally adjusted time series, the trajectory is still going up,” Mapa said in a mix of English and Filipino on Tuesday, October 6.
While some of September’s increase could fade as weather-related disruptions ease, Mapa said other sources of inflation could prove harder to unwind.
“There are items that we’re seeing now that are, as you mentioned, somewhat sticky,” he said, pointing particularly to energy, transport, and housing rents.
Headline inflation jumped to 7.2% in September from 6.1% in August, returning to the level last seen in April. The last time inflation was higher was in March 2023, when it reached 7.6%.
Average inflation from January to September stood at 5.4% , remaining well above the government’s target range of 2% to 4%.
Mapa also noted that the uptick in inflation was unusually broad. Eleven of the 13 major commodity groups posted faster inflation than in August, while 16 of the country’s 18 regions saw inflation pick up. Mapa described such a widespread monthly increase across commodity groups as “quite rare.”
“We are seeing quite a lot of risks,” he said in Filipino.
Food remained the biggest source of pressure. Food and non-alcoholic beverages posted 6.7% inflation and accounted for 73.4% of the increase in headline inflation from August. Vegetable prices swung back up after declining the previous month, while rice, fish, and other food items also became more expensive. Rice inflation alone reached 20.3%.
Some of that pressure could still prove temporary. Mapa said vegetable prices often rise after typhoons and flooding before easing once production and supply normalize.
But other components appear harder to unwind. Mapa pointed to energy, transport, and housing rents as among the items showing more persistent pressure. In September, electricity inflation reached 14.6%, gasoline 40.9%, diesel 61.3%, while rents rose 4%. Rental costs have a strong weight on inflation, and Mapa noted that increases here could affect the overall inflation rate.
Core inflation, which excludes selected volatile food and energy items, also accelerated to 4.7% from 4.1% in August, its highest level since October 2023. Mapa said 10 of the 13 commodity groups used in the core measure posted month-on-month increases, another sign that price pressures were not just confined to food and fuel.
And unfortunately, more pressure may still be coming.
The September figures did not yet fully capture the recent increases in jeepney, bus, and taxi fares, which took effect only in the final days of the month. These are expected to show up more clearly in October.
There is also the elephant in the room: the looming “super” El Niño, which Mapa said will elevate risks to food supply.
“We hope that it will go down,” he said, but added that the breadth of September’s increase showed “there are a lot of risks,” particularly among heavily weighted items such as food, energy, and transport. – Rappler.com
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