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Inflation slows further to 4.3% in October, says PSA
(Updated 4:47 p.m.) Inflation in October eased further on lower prices of food, non-alcoholic beverages registered in the month, the Philippine Statistics Authority (PSA) said Wednesday.
Consumer prices decelerated to 4.3 percent in October, slower compared to 4.4 percent in September but faster than the 2.9 percent a year earlier, PSA data showed.
"The slowdown resulted from the lower annual increments in the indices of food and non-alcoholic beverages; clothing and footwear; and restaurant and miscellaneous goods and services," the PSA said.
The heavily-weighted food and non-alcoholic beverages index slowed to 7 percent in October, the agency's data showed.
The food index alone posted a lower growth rate to 7.2 percent from 7.8 percent a year earlier, as on softer prices of meat, fish, oils and fats, vegetables, sugar, jam, honey, chocolate and confectionery.
“Ample supply of meat, fish, and vegetable items in the market and easing of commodity prices helped reduce price pressures,” Economic Planning Secretary Arsenio Balisacan said in a separate e-mailed statement.
“In part, the easing of logistics bottleneck in the port of Manila starting September 2014 may have also contributed to the abatement of price pressures in October 2014,” said Balisacan, who is also National Economic and Development Authority (NEDA) director-general.
The clothing and footwear index also eased to 3.4 percent while the restaurant and miscellaneous goods and services index slowed to 1.7 percent.
The latest inflation rate brought the year-to-date average to 4.3 percent—still at the upper end of the government target of 3 to 5 percent.
The upward adjustments in electricity charges during the period negated the favorable impact of easing prices of commodities in the international market, Balisacan said.
Price indices of electricity, gas and other fuels went up to 3.2 percent from 2.4 percent.
Electricity price increased as a result of the P0.67 per kilowatt hour generation charge of the Manila Electric Company.
'More room'
'More room'
In a text message to reporters, BSP governor Amando Tetangco Jr. said the easing inflation in October will give the central bank room to pause.
"The October inflation print should help keep inflation expectations in check, especially in light of more favorable money supply conditions as M3 has continues on its deceleration path," he said.
In its last meeting, the Monetary Board – the BSP's policy setting body – kept key policy rates unchanged after the rise in commodity prices started to normalize. Robust domestic demand, adequate domestic liquidity, and strong bank lending growth were also taken into consideration.
Meanwhile, domestic liquidity, or M3, grew 16.2 percent to P7.2 billion from P6.2 billion a year earlier, slower compared the revised 18.3 percent growth rate in August.
The government will remain vigilant against inflation risks global as economic prospects are expected to remain uneven, which may cause upward pressures on commodity prices, Balisacan said.
The BSP, on the other hand, will "continue to monitor how previous policy actionsare filtering through to the economy and see if there would be need for adjustments in our policy levers," Tetangco said. — KG/RSJ, GMA News
