HIGHER food and fuel prices, as well as a weaker peso, could have pushed inflation up in October, the Bangko Sentral ng Pilipinas (BSP) said on Thursday.
Consumer price growth, which had markedly slowed to 1.9 percent in September, was estimated to have increased to 2.0-2.8 percent — the same forecast range issued by the BSP for the month earlier.
The Philippine Statistics Authority is scheduled to release September inflation data on November 5.
“Higher prices of food commodities such as vegetables, fruits, and fish as well as the increase in prices of domestic petroleum products and the peso depreciation, are the primary sources of upward price pressures for the month,” the central bank said in a statement.
“These are expected to be offset in part by lower prices of rice and meat along with reduced electricity rates,” it added.
The BSP said it would “continue to take a measured approach in ensuring price stability conducive to balanced and sustainable growth of the economy and employment.”
BSP Governor Eli Remolona Jr. has said that inflation could go up in October, noting that the September inflation drop — from August’s 3.3 percent — was due to base effects.
“So without the negative base effects, it would have been more like 2.8 [percent], maybe. So it wasn’t that exciting,” Remolona said during a policy meeting in October.
The short-term outlook remains favorable, he also said.
Monetary authorities have lowered the risk-adjusted forecast for this year to 3.1 percent from 3.3 percent, but those for 2025 and 2026 were raised to 3.3 percent and 3.7 percent, respectively, from 2.9 percent and 3.3 percent.
Easing inflation has allowed the BSP’s policymaking Monetary Board to embark on an easing cycle, beginning with a 25-basis point reduction in August that was repeated in October.
The central bank’s benchmark rate now stands at 6.0 percent, down from the 17-year high of 6.5 percent reached in October last year as monetary authorities hike rates one last time to keep inflation under control.
The Monetary Board has one final meeting for 2024, on Dec. 19, where it is expected to again cut key interest rates by 25 basis points.
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