According to Institute for Risk and Strategic Studies Inc. chair Joey Sarte Salceda, September’s inflation rate of 1.7 percent gives the Bangko Sentral ng Pilipinas enough room to start cutting policy rates while maintaining price stability.
Salceda believes that after nine straight months of inflation below two percent, the country is now in a period of predictable and steady prices that should be used to encourage investment and growth.
He pointed out that with a core inflation rate of 2.6 percent, underlying pressures are contained. At this level, he said, the BSP can safely begin easing rates to support credit and business expansion.
‘At 1.7 percent headline inflation and 2.6 percent core, the BSP can act confidently. The risk now is not inflation, but slow growth. We should use this window to release liquidity and allow more credit to flow to firms and households,’ he said.
The former Bicol lawmaker noted that the global price environment remains favorable for the Philippines. Gold, oil and fertilizer prices, he noted, have been stable, while world grain prices are well below their 2022 levels.
‘Global commodities are calm. This means we can move proactively without the risk of imported inflation. The data tell us that this is the time to act decisively on growth,’ Salceda said.
He further cited the Philippine Statistics Authority report that national headline inflation rose slightly to 1.7 percent from 1.5 percent in August, while core inflation eased from 2.7 percent to 2.6 percent.
The year-to-date average of 1.7 percent, he said, remains below the midpoint of the BSP’s target range of two to four percent, providing ample space for a 25-basis-point rate cut before the end of the year to support lending and private investment.
The small uptick in September inflation, Salceda said, came mainly from transport and vegetables, while other prices such as meat, rice and utilities either slowed or declined.
‘This is supply-side inflation. Prices rose because of logistics and weather, not because of high demand. The right policy response is to improve supply chains, not to keep interest rates high,’ he said.
Salceda is thus urging the government to take advantage of this calm price environment to secure forward contracts for rice, fuel and fertilizer deliveries during the lean season.
He clarified that these are not import orders, but future delivery agreements that lock in prices and guarantee supply when seasonal shortages occur.
He stressed, ‘We should not wait for prices to rise before we act. The government can secure rice, fuel and fertilizer now at current prices through forward contracting with local suppliers and producers. This is smart planning, not import dependence.’
Salceda explained that such contracts would stabilize costs for farmers during the planting and harvest transitions when the demand for fuel and fertilizer is at its peak.
‘Farmers face their highest input costs right before planting and during drying. If we already locked in prices months ahead, inflation would stay low even when the lean season arrives,’ he said.
Salceda is encouraging the Department of Agriculture and the Department of Energy to coordinate on this approach. He pointed out that rice, fuel and fertilizer prices move together and should be managed together.
‘If fuel prices rise, fertilizer follows, and then rice becomes more expensive a few months later. We can break that pattern through advance contracting and better logistics coordination among agencies,’ he said.
Furthermore, Salceda elaborated, inflation is expected to remain between 1.5 and two percent for the rest of this year. He added that lower power generation costs, stable oil prices and tariff adjustments on rice will further reduce risks.
‘We are in a low inflation environment. This is the best time to invest, the best time to build and the best time to secure our supply chains,’ he said.
Salceda concluded that this period of stability should be used to generate visible benefits for households and farmers.
‘At 1.7 percent inflation, every peso buys more rice, more fuel, more fertilizer and more security. Stability is not the end goal. It is the foundation on which we must build higher productivity, better wages, and sustained growth for our people.’
Better late than never
As a baby boomer, I still remember when Western Union was the go-to remittance company in the Philippines. Back then, Western Union was the most reliable way to remit money to the Philippines, or at least to my knowledge.
Through the years, however, remittances eventually were coursed more easily and directly through the banking system, but Western Union continues to be a major player in the remittance market in the country, especially in the provinces, with the recipient receiving notification and then proceeding to a physical branch to collect the remittance.
But I was truly surprised to learn that Western Union has only now launched a new mobile app in the Philippines that will finally allow Filipinos to more easily send and receive funds from abroad while enjoying competitive foreign exchange rates.
The Philippines, it turns out, is also the first global market where Western Union is launching an app with both send and request capabilities. With its new mobile app, users who download the app can send funds abroad seamlessly, and through Western Union’s global financial network.
To send funds, app users have the option to pay online securely using the national QR code payment method QR Ph. Users of the app can request funds from senders in the US, Australia, Singapore, the UK and several other global markets with large Filipino communities, simply by filling their receiver info.
Senders will then be able to complete the transaction online from the country they reside in. Receivers have multiple options to access their funds: cash withdrawal at a retail location, deposit to bank account or directly to a digital wallet, depending on the market.
Additionally, when funds are sent from abroad, recipients will be able to redirect the funds to their preferred bank account or digital wallet. Consumers can track their transfers by entering the transaction tracking number in the app.
According to Gregory Laurent, Western Union vice president for the Philippines, Japan, Australia, New Zealand and the Pacific Islands, the launch of the new app is an important milestone to serve Filipino consumers better and connect them to their families and loved ones across the world.