Inflation Update: Below target despite typhoons 

Consumer price rise quickened in September but came in slower than expected.

Philippine headline inflation accelerated to 1.7% year-on-year (YoY) in September. Year-to-date inflation remains unchanged at 1.7%, sitting below the Bangko Sentral ng Pilipinas’ (BSP) 2%-4% full year target.

Related article: Inflation Preview: Back within target in September

Key points

• Core inflation, which excludes volatile food and energy items, decelerated to 2.6% from 2.7% in August.
• Energy and food prices continued to drive headline inflation in September, partly offset by still muted rice prices.
• Transport, vegetable, meat, and fish prices pose upside risks to inflation in the coming months. Meanwhile, rice inflation is projected to pick up by December due to low base effects.

What’s next

•  Metrobank cuts its inflation forecast for FY 2025 to 1.8%, even as we anticipate consumer price increase to pick up pace in the coming months.
• Target-consistent full-year inflation provides leeway for the BSP to further reduce its policy rate by another 25 basis points before year-end.

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ECONOMIC UPDATES

Inflation Update: Speeds up but remains below target

Slower-than-expected September inflation prompts a forecast downgrade

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