Headline inflation slowed to a year-on-year rate of 4.4 percent in September, easing from 4.9 percent in August but accelerating from the 2.7 percent recorded in September last year, the latest data from the Philippine Statistics Authority (PSA) showed on Wednesday.
The PSA traced the slowdown to the heavily weighted food and non-alcoholic beverages index.
Annual rates also decelerated in the indices for housing, water, electricity, gas and other fuels and transport prices, it said.
Inflation in Metro Manila eased to 3.5 percent from the 4.4 percent in August, still higher than the 1.1 percent in September 2013. In areas outside Metro Manila, annual inflation decelerated to 4.7 percent from 5 percent but gained pace from 3.1 percent a year ago.
Excluding selected food and energy items, core inflation held steady at 3.4 percent, unchanged from August, although higher compared with 2.3 percent in September last year.
The central bank said the September rate falls squarely within its forecast of 4.1 percent to 4.9 percent for the month.
Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said the latest inflation rate puts the year-to-date average at 4.4 percent, giving the monetary authority more confidence that the 2014 full-year average will be within its 3 percent to 5 percent target.
“Nevertheless, we continue to be mindful of the risks to the path of inflation over the medium term, which include financial market volatilities that may result from monetary policy normalization, the impact of geopolitical developments on prices of commodities, as well as changes in market inflation expectations,” Tetangco stated in a text message to reporters.
Tetangco also said that the central bank will make adjustments to policy levers as conditions warrant.
The next Monetary Board meeting in which the latest policy stance is decided and later announced is scheduled for October 23.