Philippine imports touched an all-time high in September, bulging the national trade deficit to its highest level in nine months and adding fuel to already hot inflationary fires.

The import bill was led by purchases of foreign capital goods to be deployed in President Rodrigo Duterte’s touted infrastructure-spending drive, the Philippine Statistics Authority (PSA) said on Wednesday.

The newly released data showed that imports were up 26.1% year on year in September, hitting a record high of US$9.75 billion. Those were led by iron and steel, up nearly 50% from a year earlier, and industrial machinery and equipment, up 17.3%.

Duterte has vowed his government will “build, build, build” a new “golden age” of infrastructure after previous administrations have failed to realize their own big ticket plans for new roads and rails.

The PSA will release its third quarter gross domestic product (GDP) data on Thursday. The release will be closely watched as the government recently revised down its previous 7-8% GDP growth target for the year to 6.5-6.9%.

The trade deficit widened to US$3.9 billion in September, marking the sixth straight month the gap stayed above US$3 billion, Reuters reported.

The deficit spanning the January-September period rose to US$29.9 billion, up from US$17.5 billion over the same period last year, the report said.

Rising imports were met with falling exports, which dipped 2.6% month on month in September to US$5.8 billion. Shipments had risen for three consecutive months before September’s fall.

The trade imbalance is expected to put further pressure on the peso, which has slid near 13-year lows vis-à-vis the US dollar in recent months despite two recent 50 basis point benchmark interest rate hikes.

The bigger headache for government economic managers is galloping inflation, which hit its fastest pace in nine years in October as food, transport and utility prices have surged in recent months.

PSA reported on Tuesday that prices of widely used goods were up 6.7% year on year in October, the same rate recorded in September. Government officials have expressed confidence the recent surge has steadied, though analysts and economists are uncertain.

It was not immediately clear how much recent government moves to reduce import quotas on certain food products, including rice, contributed to the record-high imports.

PSA said on Tuesday that food and non-alcoholic drinks accounted for 3.7 percentage points of headline inflation, but was down as a segment month on month from 9.7% in September to 9.4% in October.

Politically sensitive rice prices, which account for nearly 10% of the basket of goods used to compute inflation, were up 10.7% in October versus 10.4% previously, local reports said.

PSA said October’s price pace brought year-to-date inflation to 5.1%, well beyond the central bank’s 2-4% target band.

Authorities have recently said they aim to rein-in inflation to 4% next year, in part by loosening further import quotas on rice. But a rising trade deficit threatens to further depreciate the peso, making imports more expensive while driving up local prices.