Inflation still at 9-year high
Fuel, transpo keep rate at 6.7%—PSA
The October figure matched the 6.7-percent increase in consumer prices in September. This brought the average inflation rate in the first 10 months to 5.13 percent, above the government’s target range of 2 percent to 4 percent for 2018. Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr., however, said the latest data supported the bank’s view that inflation pressures were finally moderating. READ: October inflation rate likely slowed to 6.5% “It is 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,” Espenilla said in a message to reporters. He said the policy-making Monetary Board would take into account the latest inflation number and other incoming data including the gross domestic product growth in the third quarter set to be released this week during the next policy meeting this month “when it determines if there is still need for further policy rate adjustments.” Data from the PSA showed that while the year-on-year headline inflation was steady at 6.7 percent, seasonally adjusted month-on-month inflation eased further to 0.3 percent. PSA undersecretary and civil registrar general Lisa Grace Bersales said in a news briefing that mixed movements in the annual growths were posted among the commodity groups. She said the higher annual increases were observed in the indices of transport, 8.8 percent; housing, water, electricity, gas and other fuels, 4.8 percent; health, 4.3 percent; recreation and culture, 3.1 percent; and restaurant and miscellaneous goods and services, 4.2 percent. Bersales said the slowdown in the annual increments was seen in the indices of food and non-alcoholic beverages at 9.4 percent and alcoholic beverages and tobacco at 21.6 percent. “The annual rate of the food index decelerated to 9.2 percent in October 2018. Its annual growth in the previous month was 9.7 percent and in October 2017, 3.4 percent,” Bersales said. She said amid the government’s implementation of different measures to tame inflation, the unchanged inflation in October could be attributed in part to the impact of typhoon Ompong that mostly struck provinces in northern Luzon in the middle of September. “We noted the damaged areas reported higher inflation,” Bersales said. Bersales said Typhoon “Rosita’s” impact might be felt in the November inflation rate, if it had any impact at all. Nicholas Mapa, senior economist of ING Bank NV Manila branch, said while price pressures abated somewhat, inflation remained elevated. “The 6.7-percent print validates the earlier expectation that inflation was close to or had peaked for the year and is now expected to taper off slowly going into the year-end. Measures undertaken by the government to address supply chain bottlenecks appear to have found their way to tag prices, alleviating some pressure on food prices but inflation remains sticky given supply constraints,” Mapa said. The government’s economic team said concerted efforts, as prescribed in Administrative Order 13, to tame the prices of goods in the previous months had finally resulted in expected outcomes. “The economic team is mindful that much attention has to be given to food, which remains to be the major contributor to inflation even as its price decelerates. To hasten the decline in consumer prices, the government must continue enforcing mitigating measures, particularly interventions in the food supply, one of which is rice,” it said. “To compensate for the lost harvest in typhoon-affected areas, rice imports should be closely monitored to ensure that their arrival is timely and sufficient,” the economic team said. The government said rice imports, along with the rice inventory of the National Food Authority, continued to improve with the completion of the government-to-government procurement and the first phase of 2018 Minimum Access Volume. “We also call on concerned government agencies, especially the Department of Agriculture, to speed up initiatives to distribute seed buffer stocks for rice, as well as corn and other high-value crops, in disaster-stricken areas in time for the planting season this November to January,” the team said.