(Eagle News) – Bangko Sentral ng Pilipinas said that the inflation recorded last October, pegged at 6.7 percent, the same as the previous month, meant that “inflation pressures have started to moderate.”
The BSP said that the “month-on-month seasonally-adjusted headline inflation” had actually “eased further to 0.3 percent in October from 0.8 percent in September.
It said this confirmed the “BSP’s view that inflation momentum has started to slow down.”
“Inflation held steady in October as inflation for food items decelerated even as it was matched by the increases in inflation recorded for non-food items,” it said in a release.
The BSP explained that the food inflation rate “moderated in October 2018 due to slower price increases of corn, meat, fruits, and vegetables.”
“However, prices of rice and fish remained elevated posting double-digit inflation rates during the month.”
The BSP pointed out that while food items had slower price increases, non-food inflation rose to to 4.2 percent year on year.
It said this is “partly attributed to higher charges for water services with the approved rebasing and foreign currency differential adjustment.”
“At the same time, transport inflation also accelerated due to upward adjustments in the prices of domestic petroleum products, largely influenced by the higher international crude oil prices,” it said.
BSP governor Nestor Espenilla said October’s inflation rate meant that prices are finally tapering off which is a result also of efforts of the country’s economic managers.
“It’s a significant deceleration although the headline figure remains elevated. Second round effects are also muted so far. That augurs well for a return to inflation target by 2019,” he said in a statement issued on Tuesday.
“The latest inflation reading is within the BSP’s forecast range for the month and supports the view that inflation pressures have started to moderate,” a BSP statement said.
“The Monetary Board will take into account this latest development and other incoming data at its next policy meeting to determine if there is a need for further policy rate adjustment in order to ensure that inflation and inflation expectations remain consistent with the inflation target over the policy horizon,” it added.
The Philippine Statistics Authority said that the 6.7 percent inflation rate last October was the same as the previous month’s inflation rate.
This halted the continuing rise of the index since January, according to government statistics.
This October’s 6.7 percent inflation was however significantly higher compared to the 3.1 percent inflation for October last year.
According to the Philippine Statistics Authority, “relative to the annual rates in the previous month, higher annual increases were observed in the indices of the following commodity groups:
• Housing, Water, Electricity, Gas, and Other Fuels, 4.8%;
• Furnishing, Household Equipment and Routine Maintenance of the House, 3.7%;
• Health, 4.3%;
• Transport, 8.8%;
• Recreation and Culture, 3.1%; and
• Restaurant and Miscellaneous Goods and Services, 4.2%.”
