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Inflation quickens to three-year high in October

October’s consumer price index settled at 3.5 percent, picking up from September's 3.4 percent and is the fastest pace since November 2014. File

MANILA, Philippines — Inflation further accelerated to a three-year high in October, according to the latest data from the Philippine Statistics Authority, that matched analysts' estimates and within the Bangko Sentral ng Pilipinas' 3.2-3.7 percent forecast for the month.

October’s consumer price index settled at 3.5 percent, picking up from September's 3.4 percent and is the fastest pace since November 2014.

READ: Inflation likely peaked at 3-yr high 3.5% in October

Sought for comment, Guian Angelo Dumalagan, market economist at the Land Bank of the Philippines, attributed last month’s inflation to the rise in oil prices, the depreciation of the peso, and the jump in food costs due to bad weather.

“Oil is an input to the production of many consumer goods. Hence, a rise in oil prices would have a significant impact to overall inflation,” Dumalagan said in an e-mail interview.

“Aggravating the impact of rising oil prices is the weakening of the peso, which makes imported products, including oil, more expensive in local currency terms,” he added.

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For its part, the BSP said it expects inflation to remain manageable “over the policy horizon.”

“Inflation is projected to settle near the midpoint of the national government’s target range of 3.0 percent ± 1.0 percentage point in 2017 to 2019,” BSP Governor Nestor Espenilla Jr. said in a statement.

“Firm domestic economic activity, ample liquidity, and well-anchored inflation expectations continue to support within-target inflation,” Espenilla also said.

“Looking ahead, the BSP will remain vigilant against any risks to the inflation outlook to ensure that the monetary policy stance remains consistent with the mandate of preserving price stability conducive to economic growth,” he added.

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