The inflation rate in October stood unchanged at 2.3 percent from a month ago as slower increases in the prices of health commodities, alcoholic beverages and tobacco offset the rise in food prices, the Philippine Statistics Authority said Friday.
Latest data from PSA showed inflation was slightly higher than 0.4 percent recorded in the same month a year ago.
The October data brought year-to-date inflation rate to 1.6 percent, or within the government’s target of 2 percent to 4 percent.
Core inflation, which excludes selected volatile food and energy prices, was also stable at 2.3 percent in October.
The National Economic and Development Authority said inflation for the full year was set to settle below the target range.
“We expect inflation for full year 2016 to settle below the target range but upside risks remain,” Economic Planning secretary Ernesto Pernia said.
He said while domestic demand was expected to remain robust, supply conditions, particularly of food, would improve.
“This should help keep commodity prices steady. Rice prices will be kept stable by the timely arrival of rice imports under the government-to-government procurement scheme,” said Pernia.
BANGKO Sentral ng Pilipinas Governor Amando Tetangco Jr., meanwhile, is confident the inflation rate would continue to be manageable in the coming months.
“The turnout is in line with our view that inflation will be manageable over the policy horizon, and slowly rise to within target in 2017 and 2018,” Tetangco said in a text message.
“We will continue to monitor pending petitions for hikes in utility rates, among others, on the domestic front; and global economic activity on the external front as well as risk factors to the outlook,” Tetangco added.
Food inflation slightly increased to 3.5 percent in October from 3.1 percent in the previous month.
Vegetable prices further inched up in the same month due to limited supply due to weather-related disruptions caused by typhoons Lawin and Karen.
Pernia cited risks to inflation, including a possible rally in oil prices, depreciation of the peso against the US dollar, pending petitions for electricity rate increase and tropical cyclones.
The Philippine Atmospheric, Geophysical and Astronomical Services Administration reported a 65 percent chance of La Niña developing in the fourth quarter of 2016 and lasting until February 2017.
“Given the larger possibility of more frequent and stronger rains, the agriculture sector needs to implement adaptation measures to protect the income of farmers and keep food price inflation at bay,” said Pernia.
“We aim to strengthen the agricultural sector though a comprehensive agricultural development program, a major component of the proposed Philippine Development Plan 2017-2022,” he said. With Julito G. Rada