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Highest Since 2018: PH Inflation Rate Surges to 7.7% in October

Photo for the Article - 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 Philippinesโ€™ 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 monthโ€™s rate was within the Bangko Sentral ng Pilipinasโ€™ 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 governmentโ€™s average inflation target range of 2.0%โ€“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. 

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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.

โ€œInflation 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),โ€ the BSP Chiefโ€™s statement read.

Photo for the Article - Highest Since 2018: PH Inflation Rate Surges to 7.7% in October
OUCH! BSPโ€™s list of major sources of October 2022 inflation shows that the Food and Non-Alcoholic Beverages Category contributes 37.75 points to the rate.

Consequently, the central bank noted that the latest inflation reading affirms the BSPโ€™s assessment that inflation is likely to remain above target in the near term amid broadening price pressures and second-round effects. 

โ€œLooking 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 Governmentโ€™s efforts to improve farm productivity and address supply bottlenecks for key food items,โ€ the Central Bank concluded.

Recently, BSP Governor Benjamin Diokno said in a banking forum that it will not be โ€œthe end of the worldโ€ 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 โ€œthe economy can withstand it.โ€ (Read more: BSP โ€“ Not End of the World if Peso Hits 61 to a Dollar)

This article is published on BitPinas: Highest Since 2018: PH Inflation Rate Surges to 7.7% in October

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