Philippine headline inflation this month looks headed down to an all-time low of 0.5 percent from the previous record of 0.6 percent the preceding month as indicated by a further drop in prices of basic commodities and electricity, the Department of Finance (DoF) said.
Inflation is likely to continue to be tempered by tamed food price changes, it said.
The Philippine Statistics Authority (PSA) is releasing inflation figures for September on October 6.
“Inflation in September is expected to stay below 1 percent. This time, however, it may fall to 0.5 percent, breaking the 0.6 percent mark last month,” the DoF said in its latest Economic Bulletin.
In August, headline inflation eased to a record low of 0.6 percent from 0.8 percent in July and 4.9 percent in the year-earlier period.
The “low prices of other basic commodities such as fuel and transportation continue to benefit from developments in the international market,” the DoF said in the report.
On Friday in New York, after the US Federal Reserve expressed doubts about the strength of the global economy as it held off from an interest rate hike, US benchmark West Texas Intermediate for delivery in October dropped $2.22 to $44.68 a barrel from Thursday’s close.
In London trade, Brent North Sea crude for November delivery lost $1.61 to $47.47 a barrel in London trade.
The Fed move also weakened the greenback, making dollar-priced oil less expensive for traders with weaker currencies.
The Philippine finance department pointed out that electricity rates have been down for five months in a row, and look likely to finish September 17 percent less from a year earlier.
The DoF, however, warned that measures must be taken by both government and the private sector to prepare for the full impact of the El Niño phenomenon, which should not undermine the gains in curbing food inflation achieved so far.
“Measures should also be in place to address adverse effects the dry spell would inflict on agricultural production and hydro-electric power generation,” it said.
These measures may include repair and construction of irrigation systems and farm-to-market roads, early importation of rice, cloud seeding operations and water conservation campaigns, the DoF added.