By Luisa Maria Jacinta C. Jocson, Reporter
HEADLINE INFLATION picked as much as 2.3% in October amid increased meals costs, notably rice, the Philippine Statistics Authority (PSA) reported on Tuesday.
Final month’s client value index (CPI) was quicker than 1.9% in September however slower than 4.9% a yr in the past.
The October print was throughout the Bangko Sentral ng Pilipinas’ (BSP) 2%-2.8% forecast for the month however barely under the two.4% median estimate in a BusinessWorld ballot of 11 analysts final week.
Headline inflation averaged 3.3% within the first 10 months, throughout the BSP’s 2-4% goal, giving the BSP extra room to proceed its easing cycle.
The BSP expects inflation to common 3.1% for the total yr.
“The Financial Board will keep a measured method in its easing cycle to make sure value stability conducive to sustainable financial progress and employment,” the BSP mentioned in an announcement.
Core inflation, which excludes unstable costs of meals and gas, was regular at 2.4% in October. Core inflation averaged 3.1% within the January-October interval.
The closely weighted meals and nonalcoholic drinks index was the principle supply of quicker inflation through the month, Nationwide Statistician Claire Dennis S. Mapa mentioned.
The index accelerated to 2.9% in October from 1.4% a month in the past however eased from 7% a yr earlier. It additionally accounted for a 95.4% share within the uptrend in inflation and almost half (46.9%) to the general inflation charge in October.
Cereals and cereal merchandise, which embody rice, spiked to 7.5% in October from 4.9% a month prior however eased from 10.8% in October 2023.
Rice inflation jumped to 9.6% in October from 5.7% a month in the past. The staple grain contributed 30.8% or 0.7 proportion level (ppt) to inflation through the month.
Mr. Mapa mentioned base results drove up rice inflation yr on yr. A value ceiling on rice was applied final yr.
Nonetheless, he famous that regardless of the pickup in rice inflation, the worth of the important thing commodity has been declining on a month-on-month foundation amid the latest tariff reduce on rice imports.
PSA knowledge confirmed that the common value of normal milled rice dropped to P50.22 per kilo in October from P50.47 in September; well-milled rice declined to P55.28 per kilo from P55.51; and particular rice decreased to P60.97 per kilo from P64.05.
“The expectation is that it peaked already, that is only a blip. We anticipate that it’s going to go down once more, the inflation charge and value stage per kilo within the coming months,” Mr. Mapa mentioned.
The manager order that slashed tariffs on rice imports to fifteen% from 35% till 2028 took effect in July.
“The slight uptick in our October inflation charge was primarily brought on by non permanent components, corresponding to climate disturbances like Extreme Tropical Storm Kristine and Tremendous Hurricane Leon,” Finance Secretary Ralph G. Recto mentioned.
Newest knowledge from the Agriculture division confirmed that agricultural harm attributable to Extreme Tropical Storm Kristine stood at P6.2 billion, equal to 283,528 metric tons (MT) of quantity loss.
The greens, tubers, plantains, cooking bananas and pulses index noticed a slower decline to 9.2% in October from the 15.8% contraction in September.
“We noticed costs, particularly particular objects, for instance, talong (eggplant) had a double-digit improve. The expectation is that this November, possibly the first two weeks, we’ll nonetheless see rising vegetable costs. Usually we see that after a hurricane, however that normalizes after,” Mr. Mapa mentioned.
Slower annual inflation was additionally seen for fish and different seafood (-0.4% in October from -1.2% in September).
“Additionally contributing to the uptrend was transport with a slower year-on-year lower of two.1% through the month from a 2.4% annual drop in September 2024,” the PSA mentioned.
For October, pump value changes stood at a web improve of P2.80 per liter for gasoline, P4.60 per liter for diesel, and P3.25 per liter for kerosene.
Different main commodity teams that contributed to general inflation however posted decrease inflation charges on a month-on-month foundation have been the housing, water, electrical energy, fuel and different fuels index (2.4% from 3.3%) and eating places and lodging providers (3.9% from 4.1%).
In the meantime, the inflation for the underside 30% of revenue households quickened to three.4% in October from 2.5% in September however slowed from 5.3% final yr.
Within the 10 months to October, inflation for the underside 30% averaged 4.5%.
Within the Nationwide Capital Area (NCR), inflation eased to 1.4% from 4.9% a yr earlier. In the meantime, inflation in areas outdoors NCR slowed to 2.6% from 4.9% a yr in the past.
FURTHER DOWNTREND
In the meantime, the BSP mentioned it expects inflation to stay throughout the 2-4% goal within the coming quarters.
“The newest inflation outturn is in step with the BSP’s evaluation that inflation will proceed to pattern nearer to the low finish of the goal vary over the succeeding quarters. This displays easing provide pressures for key meals objects, notably rice,” the central financial institution mentioned.
Nationwide Financial and Improvement Authority (NEDA) Secretary Arsenio M. Balisacan likewise mentioned the federal government is on monitor to protecting inflation inside goal.
“The federal government is totally dedicated to making sure value stability and defending Filipino households from undue shocks,” he mentioned.
Mr. Recto mentioned rice costs ought to proceed to ease additional within the coming months amid the entry of cheaper rice imports.
“Furthermore, the DoF (Division of Finance) is seeing a decline in rice costs within the worldwide market, following the lifting of the export ban of India introduced in late September,” he added.
Nonetheless, the central financial institution warned that the steadiness of dangers to the inflation outlook has shifted to the upside for subsequent yr and 2026.
“Upside dangers to the inflation outlook may emanate from the potential changes in electrical energy charges and better minimal wages in areas outdoors Metro Manila, whereas draw back components proceed to be linked to the affect of decrease import tariffs on rice,” it mentioned.
EASING CYCLE
With inflation anticipated to stay inside goal within the close to time period, the central financial institution can proceed on its easing cycle, analysts mentioned.
“Whereas inflation has gone up, we anticipate it to stay throughout the goal of the BSP within the subsequent 12 months, assuming no main provide shocks,” Financial institution of the Philippine Islands Lead Economist Emilio S. Neri, Jr. mentioned.
“Wanting forward, opposed climate continues to pose a big danger to meals provide and costs, although favorable base results, decrease rice tariffs, and benign value pressures in different commodity teams ought to assist preserve general inflation firmly inside goal,” Chinabank Analysis mentioned in a report.
It mentioned the Financial Board has room to proceed lowering borrowing prices at its Dec. 19 assembly.
“We proceed to see the opportunity of a BSP charge reduce in December given the favorable outlook for inflation. Nonetheless, exterior developments might also have an effect on the BSP’s choice,” Mr. Neri mentioned.
He cited dangers to this outlook, such because the peso depreciation, the US Federal Reserve’s personal rate-cutting cycle, and the US presidential elections.
Since August, the Financial Board has lowered rates of interest by 50 foundation factors (bps) this yr, bringing the important thing charge to six%.
BSP Governor Eli M. Remolona, Jr. has signaled a doable 25-bp charge reduce in December. This might carry the benchmark to five.75% by end-2024.
