The National Statistics Office reported Tuesday, Nov. 5, 2013, that the higher inflation in October was due to the 3.2-percent increase in food prices, faster than the 2.5 percent recorded in September. AFP FILE PHOTO
Consumer prices rose below expectations in October as lower power rates offset the effects of several typhoons and other calamities on the country’s food supply, government data released on Wednesday showed.
Monetary authorities said inflation might start to slow down again in the remaining two months of the year, bucking analysts’ expectations that consumer prices “bottomed out” in last July.
Inflation reached a seven-month high of 2.9 percent in October, slightly faster than the 2.7 percent recorded the month before. The year-to-date average stayed at 2.8 percent at the end of October, the same level as September.
The National Statistics Office (NSO) reported that the higher inflation in October was due to the 3.2-percent increase in food prices, faster than the 2.5 percent recorded in September.
Economic Planning Secretary Arsenio Balisacan had said that the depreciation of the peso so far in the year was unlikely to trigger inflationary problems because of favorable supply conditions.
He said the weakening of the peso to the 43-to-a-dollar territory from its close at the 41 level in end-2012 was not significant enough to disrupt the modest inflation environment.
“With the way prices are moving, it is likely that inflation for the year will average only 2.9 percent,” economist Victor Abola said. He said the low inflation environment was beneficial in that it was expected to keep interest rates in the economy low as well.
The low inflation average for the year gives the Bangko Sentral ng Pilipinas (BSP) space to keep interest rates at record lows to continue supporting the Philippine economy amid uncertainties in global markets that may spill over and dampen domestic conditions.
“By November and December, price pressures will have subsided. We don’t expect the price pressures we saw in October to slide down to November and December,” BSP Deputy Governor Diwa C. Guinigundo said.
Guinigundo said inflation could start to slow down yet again in the last two months of the year as food prices, particularly in calamity-hit areas like Northern and Central Luzon, Bohol and Cebu normalize.
By the end of the year, inflation is expected to average 2.8 to 2.9 percent, slightly below the low end of the BSP’s 3- to 5-percent target range.