Highest Since 2018: PH Inflation Rate Surges to 7.7% in October
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Editing and Additional Reporting by Nathaniel Cajuday
From 6.9 percent in September, the Philippines’ inflation rate went up to 7.7 percent year-on-year in October, the highest since October 2018, Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla announced on Friday.
Although last month’s rate was within the Bangko Sentral ng Pilipinas’ forecast range of 7.1-7.9%, due to its high percentage, the Philippine average inflation rate stood at 5.4 % from January to October 2022, which is above the government’s average inflation target range of 2.0%–4.0% for the year.
Accordingly, core inflation, which excludes selected volatile food and energy items to depict underlying demand-side price pressures, is also affected by the increase and was raised to 5.9 % in October from 5.0% last month.
Moreover, inflation also went up on a month-on-month seasonally adjusted basis in October, to 1.0% from 0.6% in September.
According to the central bank, the inflation rate increase was due mostly to the faster price increases of food commodities. There was a significant increase, particularly in food and non-alcoholic beverages, which rose to 9.4% from 7.4% in September.
Further, the top contributors to October 2022 inflation include meat, fish, and vegetables; electricity, gas, and other fuels; the operation of personal transport; food and beverage services; passenger transport services; and housing rentals.
“Inflation for fruits and vegetables went up due to supply disruptions caused by recent weather-related calamities. Sugar and meat inflation were also higher year-on-year. Meanwhile, transport inflation slowed down in October following domestic petroleum price rollbacks, which more than offset the increases in fares for jeepneys, buses, taxi, and transport network vehicle services (TNVS),” the BSP Chief’s statement read.
Consequently, the central bank noted that the latest inflation reading affirms the BSP’s assessment that inflation is likely to remain above target in the near term amid broadening price pressures and second-round effects.
“Looking ahead, the BSP is closely evaluating all risks to the inflation outlook and remains committed to taking all necessary monetary policy action to bring inflation back to a target-consistent path over the medium term. The BSP also continues to reiterate its full support for the National Government’s efforts to improve farm productivity and address supply bottlenecks for key food items,” the Central Bank concluded.
Recently, BSP Governor Benjamin Diokno said in a banking forum that it will not be “the end of the world” if the Philippine Peso hits 61 against the dollar, emphasizing that despite the increasing inflation and the continuous decline of the peso, he thinks that “the economy can withstand it.” (Read more: BSP – Not End of the World if Peso Hits 61 to a Dollar)
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