ASEAN KEY DESTINATIONS
October inflation fastest in almost three years
Headline inflation further accelerated to 3.5 percent in October, the fastest in almost three years, boosted by an increase in prices of non-food items.
“The year-on-year headline inflation at the national level further accelerated by 3.5 percent in October 2017,” the Philippine Statistics Authority (PSA) said Tuesday.
This compares with the 3.4 percent in September and 2.3 percent in October 2016.
It is also the fastest since inflation clocked in at 3.7 percent in November 2014.
Cid Terosa, dean of the University of Asia and the Pacific (UA&P) School of Economics, said the acceleration was widely expected given the increase in utility prices and the peso-dollar exchange rate.
“Because of rising prices of petroleum products and weak peso,” he said.
Pump prices of petroleum products increased in three out of the four weeks of October, while the peso fell to fresh 11-year lows against the dollar during the month.
According to the PSA, the biggest price increases were reported in the following commodity groups:
Alcoholic Beverages and Tobacco—6.8 percent
Housing, Water, Electricity Gas and Other Fuels—4.0 percent
Recreation and Culture—1.5 percent
Restaurant and Miscellaneous Goods and Services—2.6 percent
The latest inflation figure was in line with the 3.2-to-3.7 percent outlook of the Bangko Sentral ng Pilipinas and the 3.5 percent forecast of the Department of Finance.
BSP Governor Nestor Espenilla Jr. does not expect runaway inflation in the near-term.
"The BSP expects inflation to remain manageable over the policy horizon after taking into account the latest assessment of price levels in October," he said in a text message to reporters.
"Inflation is projected to settle near the midpoint of the National Government's target range of 3.0 ± 1.0 percentage point in 2017 to 2019," he said.
Current conditions continue to support the government's inflation target, the central bank chief noted.
"Firm domestic economic activity, ample liquidity, and well-anchored inflation expectations continue to support within-target inflation," he said.
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