Inflation eases to four-month low of 3.1%
The National Statistics Office (NSO) reported that inflation eased to 3.1 percent in October as production of selected goods increased ahead of the holiday season.
Cheaper prices of agriculture and fish products helped slow down overall price increases to the lowest in four months, the National Economic and Development Authority (Neda) added.
Private economists said rice increases might still be tame even toward Christmas given recent trends and influencing factors, including the adequate supply of goods, the stronger peso and relatively tame oil prices.
The NSO reported Tuesday that stable to lower prices of certain food items, together with lower electricity rates and tame fuel prices in many regions, contributed to the year on year slowdown in price increases. Inflation in October last year was 5.2 percent.
The latest figure brought the average inflation from January to October to 3.2 percent, or within the government’s target range of 3 to 5 percent. Inflation in October was also lower than the 3.6 percent in September this year.
“I’m not surprised at all with the dip in the inflation rate in October. I don’t foresee a surge in inflation in November and December. With the economy slowing, oil prices falling, peso strengthening and base effects—the combination of these factors may lead to a moderate inflation rate for the rest of the year. Tamer inflation may justify another cut in policy interest rate as a defensive measure against the massive inflow of hot money,” said former budget secretary Benjamin E. Diokno of the UP School of Economics.
Economist Cid L. Terosa of the University of Asia and the Pacific was also optimistic that even if prices would increase in the last two months of the year, the jump would be minimal since the supply of goods and services was expected to be enough to meet demand. “The only concern would be the prices of petroleum products since [these] exert upward pressure on prices,” Terosa said. He added that the 10-month average inflation rate was “desirable” as it was within the target range and that a low inflation environment would help producers minimize cost while enhancing the purchasing power of consumers.
In Metro Manila, inflation eased to 2.9 percent in October from 3.5 percent the previous month, NSO said. “This slide was due to mainly lower year-on-year price increases in major commodity groups such as food and non-alcoholic beverages (1.7 percent from 4.3 percent) and restaurant and miscellaneous goods and services (3.7 percent from 3.8 percent),” it noted.
Outside Metro Manila, price increases eased to 3.3 percent in October from 3.7 percent in September.
The year-to-date inflation in Metro Manila stood at 2.9 percent, which was still slower compared to 3.2 percent outside the capital.
