Metro Manila (CNN Philippines, October 31) — Price increases for basic goods likely remained muted in October, with the Bangko Sentral ng Pilipinas (BSP) hinting that the inflation rate could fall below one percent for the second straight month.
The BSP’s Department of Economic Research said October inflation may have settled between 0.5 and 1.3 percent. This is a bit slower than the 0.6-1.4 percent forecast range which the unit gave for September, which ended at a 0.9 percent actual print.
Inflation tracks the price movements of widely-used goods like food and fuel. The slowdown is still due to lower domestic fuel and rice prices when compared to the rates in October 2018, which saw inflation at a nine-year high of 6.7 percent.
The price of well-milled rice at the retail market has dropped by 14.5 percent as of the first week of October versus the previous year, according to the Philippine Statistics Authority (PSA).
“The increases in electricity and water rates as well as higher prices of LPG (liquefied petroleum gas) and selected food items are seen as the primary sources of upward price pressures for the month,” the central bank added.
Major power distributor, Manila Electric Company, announced an increase in the generation charge in October, ending five straight months of declining power rates. Metro Manila water concessionaires Maynilad and Manila Water also announced rate hikes for the last three months of the year to cover foreign currency adjustments.
Inflation has averaged 2.8 percent for the first nine months, against the BSP’s 2.5 percent estimate for the full year. BSP Governor Benjamin Diokno said annual inflation will stay near the middle of the government’s 2-4 percent target until 2022, a recovery from last year’s price spikes.
The PSA will release latest inflation data on November 5.
Diokno earlier said that prices are likely to pick up faster due to volatile oil prices, as well as the African Swine Fever and its possible impact on meat costs.
