October inflation inches up to 2.3%; Still within govt target

The inflation rate for October went up slightly to 2.3% from the 1.9% of September, which is still within the government’s 2% to 4% target.

In October last year, the inflation rate was much higher at 4.9%. The October data brings the national average inflation rate from January to October 2024 to 3.3%.

The within-target inflation rate boosted market sentiment on Tuesday, with the Philippine Stock Exchange index (PSEi) closing at 7,257.94 or up by 1.71% from its close on Monday. It was also the first time in three days that the PSEi closed above 7,200 points.

National Statistician Dennis Mapa said on Tuesday that the higher inflation in October was primarily caused by the faster increase in food and non-alcoholic beverages at 2.9% in October from 1.4% in September.

Despite the increase, the National Economic and Development Authority (NEDA) and the Bangko Sentral ng Pilipinas (BSP) are optimistic that inflation will remain within target this year.

“The latest inflation figures confirm that we are on track to keep inflation within target. The government is fully committed to ensuring price stability and protecting Filipino households from undue shocks,” NEDA Secretary Arsenio Balisacan said in a statement.

Balisacan assured the public that while recent weather disturbances posed challenges to the country’s food supply and logistics, the government will work “relentlessly to keep food available and prices steady, particularly for essential commodities.”

“With targeted support and streamlined food supply chains, we aim to ensure that food is affordable and accessible for Filipino families, especially those most vulnerable to price shocks when disasters hit us,” Balisacan said.

For its part, BSP said the October inflation is within its forecast range of 2% to 2.8%.

“The latest inflation outturn is consistent with the BSP’s assessment that inflation will continue to trend closer to the low end of the target range over the succeeding quarters,” said the BSP.

“This reflects easing supply pressures for key food items, particularly rice,” it added.
The BSP said the balance of risks to the outlook for 2025 and 2026 has revealed upside risks, including the potential adjustments in electricity rates and higher minimum wages in areas outside Metro Manila. Meanwhile, the downside factors continue to be linked to the impact of lower import tariffs on rice.

“The Monetary Board will maintain a measured approach in its easing cycle to ensure price stability conducive to sustainable economic growth and employment,” the BSP said.

(PHOTO FROM PNA)