Finance Secretary Ralph G. Recto has welcomed the sharp drop in the country’s inflation rate to 1.9% in September 2024––the lowest in four years––and vowed to intensify whole-of-government efforts to keep prices affordable to ensure a joyful Christmas celebration for all Filipinos.

“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,” the Finance Chief said.

The headline inflation rate in September 2024 was the lowest since May 2020 and way below the 3.3% recorded in August 2024 and 6.1% in September 2023.

It also surpassed expectations, falling under the median estimate of 2.5% from private sector analysts and the Bangko Sentral ng Pilipinas’ (BSP) forecast of 2.0% to 2.8%.

This brought the year-to-date inflation rate to 3.4%, well within the government’s target band of 3% to 4%.

“With the better-than-expected inflation outcome for September, we expect the full-year rate to settle at around 3.2%. 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,” Secretary Recto said.

The sharp reduction in September’s inflation was primarily due to slower increases in the prices of food and non-alcoholic beverages, which accounted for 69.1% of the decline; transport (14.6%); as well as housing, water, electricity, gas, and other fuels (9.4%).

Food and non-alcoholic beverages also drove the deceleration of inflation for the bottom 30% of households, which significantly fell to 2.5% in September. It accounted for a sizable 88.7% of the decrease.

The reduction in the overall food inflation was due to a slower increase in the price of rice at 5.7% in September from 14.7% in the previous month––the lowest rate recorded in over a year.

This was a result of the implementation of Executive Order (EO) No. 62 lowering the tariff on imported rice in July 2024, which led to a further increase in the volume of rice imports to 177,000 metric tons (TMT) in September, up by 42.6% from June.

The decline in retail rice prices is expected to become more pronounced in the coming months following India’s decision to lift its export ban on non-basmati white rice and as retailers deplete their inventories bought at higher prices—before the tariff reduction.

New interventions to address food and non-food inflation

The recently enacted Anti-Agricultural Economic Sabotage Act is expected to curtail the rampant smuggling, cartels, profiteering, and hoarding of agricultural products to ensure food security for Filipinos.

The Department of Finance (DOF), with the Bureau of Customs (BOC), is preparing for the full implementation of the new law to protect the Filipino people’s access to affordable goods and boost revenue collections.

The Department of Agriculture (DA) is also stepping up its efforts to implement targeted measures that will safeguard the welfare of farmers and improve agricultural productivity.

It is set to introduce interventions that will incentivize hog raisers affected by the African swine fever (ASF) to comply with biosecurity, such as enhancement of indemnification/insurance payouts.

The DA is targeting to procure a total of 600,000 ASF vaccine doses by year-end and will prioritize providing these to smallholder swine raisers, considering that they account for more than 70% of the country’s swine inventory.

Meanwhile, the Sugar Regulatory Administration (SRA) will ensure the implementation of measures to manage the fall armyworm (FAW) infestations and mitigate their impacts on sugarcane yield and quality.

In addition, to protect the local poultry industry, the DA recently issued Memorandum Order (MO) No. 40 temporarily banning the importation of domestic and wild birds from France in response to reports of an avian influenza outbreak in early August.

Efforts to address non-food inflation are also intensified such as the staggered implementation of electricity rate hikes to mitigate the impact of electricity price increases on consumers as well as the mandatory implementation of higher biodiesel blends from 2% to 3% to mitigate future increases in oil prices.