Private sector inflation forecast higher than actual rate

Most private sector institutions overestimated the inflation rate for September 2021, with their median projection at 5 percent, which is higher than the actual headline inflation of 4.8 percent.

Only two analysts from the Asian Institute of Management and Colegio de San Juan de Letran accurately projected a lower inflation rate of 4.5 percent and 4.7 percent, respectively.

Fifteen other institutions forecasted inflation rates ranging from 4.9 percent to 5.2 percent, with several prominent economists predicting 4.9 percent or 5 percent.

The Department of Finance noted that private sector analysts seemed to anticipate a worse scenario, leading to their slightly higher median projection.

The actual inflation rate of 4.8 percent in September 2021 was a slight decrease from the previous month's 4.9 percent and fell within the Bangko Sentral ng Pilipinas' (BSP) estimated range.

This monthly easing was primarily attributed to a slower increase in the transport index, along with decelerated upticks in food and non-alcoholic beverages, furnishing, household equipment, communication, and education indices.

Despite the slight easing, the average inflation rate for the period is 4.5 percent, exceeding the BSP's target range of 2 percent to 4 percent.

BSP Governor Benjamin Diokno anticipates inflation to remain elevated in the short term before returning to target levels by the end of 2021, citing supply-side factors such as weather disturbances, global oil prices, and African swine fever as key drivers.