DOF pegs October inflation at 2.5%

Consumer prices likely advanced at a faster pace this month because of base effects, even if the inflation rate stays within official target, the Department of Finance (DOF) said Friday.
 
The department expects inflation to settle at 2.5 percent in October from 2.3 percent in August and 0.4 percent a year earlier.

“Just like last month, the apparent surge in inflation rate is the result of base effects. October last year registered inflation rate of 0.4 percent,” Finance Undersecretary Gil Beltran noted in a DOF Economic Bulletin.

The DOF forecast would place the 10-month inflation rate at 1.6 percent, compared with 2.0 percent to 4.0 percent range targeted by the inter-agency Development Budget Coordination Committee.

“The benign inflation will continue to support economic growth and steel the economy from external volatilities,” Beltran said.

Index heavyweights like food and non-alcoholic beverages may rise to 3.3 percent from 3.1 percent, while prices of tobacco and alcoholic beverages could accelerate by as much as 6.5 percent from 6.2 percent in September.
 
Prices of clothing and footwear may increase at 2.8 percent from 2.7 percent; furnishings, households equipment may jump to 2.4 percent from 2.3 percent; and recreation and culture at 1.8 percent from 1.7 percent.
 
Housing, utilities and fuels could also increase from 0.9 percent to 1.1 percent this month; and transport from 0.2 percent to 0.6 percent.

However, health at 2.7 percent, restaurant and miscellaneous services at 2.4 percent, education at 1.8 percent, and communication at 0.1 percent would likely remain unchanged from the month-earlier levels.
 
This month, the Manila Electric Co. lowered the rate per kilowatt hour (kWh) at P8.65 from P8.77 in September and P8.74 a year earlier for a household consuming an average of 250 kWh a month.
 
Based on the pump prices of Caltex, Petron and Pilipinas Shell, the average price of diesel in Metro Manila accelerated at P28.04 per liter from P25.74 in September and P26.89 registered in October 2015.
 
The average price per liter of gasoline also increased at P42.27 per liter from P37.83 and P41.7 in the same comparable periods.
 
Beltran noted in an earlier economic bulletin the inflation rate would likely stay above 2.0 percent in the short-term owing to higher commodity costs. Core inflation rose at a faster rate in August to September, signaling a possible spike in consumer prices in the coming months. — VDS, GMA News