INFLATION AT 6.7% IN OCT

Inflation peaked in the third quarter, although it could remain elevated for the rest of the year

The annual increase in the prices of goods and services remained at a nine-year high of 6.7 percent in October 2018, the Philippine Statistics Authority (PSA) announced on Tuesday, November 6.

The October headline inflation rate was unchanged from September’s 6.7 percent. It was, however, faster than the 3.5 percent in October 2017.

The Bangko Sentral ng Pilipinas (BSP), in a statement, said the October outturn was consistent with its assessment that inflation had peaked in the third quarter, although it could remain elevated for the rest of the year.

“The start of the harvest season for rice and improved weather conditions have contributed to some downward price pressures on rice prices. In addition, the implementation of non-monetary measures is also expected to result in a deceleration in food prices,” BSP said.

“Moreover, the approval of rice tarrification could lead to an earlier return to within target inflation in 2019 and to approach the midpoint of the target range in 2020,” the central bank added.

The PSA said there were mixed movements in the inflation rates of the different commodity groups.

Six commodity groups posted higher inflation, namely housing, water, electricity gas, and other fuels (4.8 percent); furnishing, household equipment and routine maintenance of the house (3.7 percent); health (4.3 percent); transport (8.8 percent); recreation and culture (3.1 percent); and restaurant and miscellaneous goods and services (4.2 percent).

Food and non-alcoholic beverages inflation barely changed to October’s 9.4 percent from September’s 9.7 percent. The alcoholic beverages and tobacco basket was also stable at 21 percent in October from 21.8 percent last month.

Price increases slowed in corn and meat, both at 7.5 percent; fruits, 4.3 percent; and vegetables, 15.8 percent.

Other food groups registered higher annual increments in October.

Presidential Spokesperson Salvador Panelo said it could be considered “good news” that the headline inflation “did not go up.”

Panelo also believed that the latest inflation rate reflects the government’s efforts to temper the rising prices of goods.