October inflation seen highest in 3 years

Inflation likely rose 3.5 percent in October, a three-year high, mostly due to higher power costs and oil prices, the Department of Finance (DOF) said.

In an economic bulletin released yesterday, Finance Undersecretary and chief economist Gil S. Beltran projected prices of electricity, gas and other fuels to have had gone up by 9.2 percent year-on-year last month from 8.2 percent in September; alcoholic beverages and tobacco, up 6.7 percent from 6.4 percent a month ago; housing, utilities and fuels, up 4.1 percent from 3.8 percent; furnishings and household equipment, up 1.9 percent from 1.8 percent, and recreation and culture, up 1.5 percent from 1.4 percent.

“DOF data also showed that Meralco rate per kilowatt hour for a household consuming 200 kilowatts per month increased to P9.28 from P9.25 in September. Also, Meralco generation charge per kWh in October increased to P4.72 from P4.54 in September,” Beltran added.

A check with Philippine Statistics Authority data showed that if the October headline inflation rate reached 3.5 percent, it would be the fastest rate of increase in prices of basic goods and services since the 3.7 percent posted in November 2014.

As for food inflation, Beltran said it started to taper down last month, slightly easing to 3.5 percent from September’s 3.6 percent.

Moving forward, consumer prices would remain manageable on the expected palay harvest in the latter part of the year and as base effects from the utilities sub-group taper off, Beltran said.