Headline inflation could have accelerated to a three-year high of 3.5 percent in October, the Department of Finance (DoF) said, driven by increases prices of non-food commodities.
The forecast, while within the 2 percent to 4 percent target for the year, is higher than the 3.4 percent registered in September and the 2.3 percent recorded a year earlier.
Domestic inflation last exceeded 3.5 percent in November 2014 when it hit 3.7 percent. Official October data will be released today by the Philippine Statistics Authority.
The Bangko Sentral ng Pilipinas (BSP), citing higher pump and utility prices, earlier issued a forecast range of 3.2 percent to 3.7 percent for the month.
In an economic bulletin, Finance Undersecretary Gil Beltran said that consumer prices would remain manageable, especially given a palay harvest in the latter part of the year and as base effects from the utilities sub-group taper off.
“Food inflation may decline further in November 2017 as the rice harvest season has started pushing down domestic rice prices,” said Beltran, who is also the department’s chief economist.
He also said that food prices had started to taper, easing to 3.5 percent from 3.6 percent in September.
By commodity group, the Finance department said prices of alcoholic beverages and tobacco likely increased to 6.7 percent from 6.4 percent; housing, utilities and fuels to 4.1 percent from 3.8 percent; electricity, gas and other fuels to 9.2 percent from 8.2 percent; furnishings and household equipment to 1.9 percent from 1.8 percent; and recreation and culture to 1.5 percent from 1.4 percent.
Accompanying data also showed that Meralco’s per kilowatt-hour (kWh) rate for a household consuming 200 kilowatts per month increased to P9.28 from P9.25 in September. Also, Meralco’s generation charge October increased to P4.72/kWh from P4.54 in September 2017.
September’s 3.4% inflation — a five-month high and up from 3.1 percent in August – was attributed to higher a annual increment for food and non-alcoholic beverages (5 percent) and a double-digit increase for transport (11.3 percent).
This brought average inflation to 3.1 percent for the first nine months of the year, still within the target range of 2 to 4 percent.
The BSP’s policymaking Monetary Board took the result into account during its last meeting on September 21, 2017, where it decided not to touch benchmark interest rates mainly because of manageable inflation environment and robust domestic economic growth.
Monetary authorities also maintained their inflation forecast for this year and next at 3.2 percent. The forecast for 2019 was adjusted upward to 3.2 percent from the earlier estimate of 3.1 percent.
The Monetary Board will again discuss policy this Thursday.