Inflation rate stayed at a record-low 0.4 percent in October, on ample food supply and reduced prices of fuel and electricity, the Philippine Statistics Authority said Thursday.
Data from PSA showed inflation rate remained stable at 0.4 percent, the same figure seen in the previous month and lower than 4.3-percent in October last year.
“The current low inflation environment is expected to continue throughout the year. This will largely be due to favorable supply-side factors such as the availability of ample food supply and low international oil prices,” said Economic Planning Secretary Arsenio Balisacan.
The October inflation also settled within Bangko Sentral’s forecast of 0.1 to 0.9 percent for the period. Inflation in the first 10 months averaged 1.4 percent, below the government’s target range of 2 percent to 4 percent for the year.
“Our current runs show inflation is possibly bottoming out, and it will gradually move to within target range [2 percent to 4 percent] in 2016 to 2017. While there seems to be room to ease given the relatively lower inflation at the moment, risks to the outlook remain—El Niño and pending requests for utility rate hikes, for instance,” Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said in a text message.
Tetangco said as domestic demand was steady, there seemed to be no need for further monetary support. “We need to balance these versus domestic liquidity conditions, especially as market anticipates Fed action towards year-end. We will make adjustments to policy as conditions warrant,” he said.
Data showed that inflation for the food subgroup remained stable in October 2015, due to large price declines in bread and cereal, rice and corn.
“These offset the slight price increase in some food items such as meat and vegetables on account of the damage caused by typhoon Lando which affected supply,” Balisacan said.
Lower prices in electricity, gas and other fuels continued, on lower generation charge in October 2015. Prices of gasoline, kerosene, diesel and LPG remained relatively lower due to the persistent downward movement of international crude oil prices.
Meanwhile, non-food items showed slight price increments of 0.2 percent in October 2015.
Core inflation, which excludes selected energy and food prices, slightly increased to 1.5 percent from 1.4 percent in September 2015. Core inflation averaged 2 percent in the first 10 months.
“This indicates that price adjustments across a broad range of consumer items are relatively stable,” Balisacan said.
He said while the environment remained favorable for low inflation, El Niño posed upside risks.
“Upside risks could come from the stronger and prolonged El Niño’s impact on food prices and also possible increase in utility rates given the pending petitions for power rate adjustments,” he said.