PH inflation eased to 4.9% in Oct

MANILA  -Inflation significantly eased in October on the back of slower increase in food prices, the Philippine Statistics Authority reported Tuesday.

Inflation, as measured by the consumer price index, slowed to 4.9 percent year-on-year in October, from 6.1 percent in September.

The latest reading brought the 10-month average to 6.4 percent, still above the Bangko Sentral ng Pilipinas’ 2 to 4 percent annual target.

The figure was also better than the BSP’s own forecast, which estimated last month’s inflation at between 5.1 to 5.9 percent.

At a press conference, National Statistician Claire Dennis Mapa said the softer inflation print last month was mainly due to slower price growth of key food items. Data showed food inflation eased to 7 percent in October from 9.7 percent in the previous month.

The restaurants and accommodation services index also contributed to the downtrend, with an inflation rate of 6.3 percent in October from 7.1 percent in September.

READ:  Rate hike pause seen likely in November

The October inflation figure would be a key data point for a central bank that has yet to decide whether it would tighten monetary policy further at its Nov 16 meeting, or slam the brakes on rate increases. This, following an out-of-schedule decision in late October to lift the key rate by 25 basis points to 6.50 percent, a fresh 16-year high.

Justifying the recent off-cycle hike, BSP Governor Eli Remolona Jr. said the Monetary Board (MB) “recognized the need for this urgent monetary action” to send a strong message to the market that the BSP is doing everything to bring inflation back to its 2 to 4 percent target.