Inflation picks up to 2.5% in October

MANILA, Philippines — Consumer prices rose at a faster pace last month, driven by higher food and transport costs, the Philippine Statistics Authority (PSA) said yesterday.

In its report, the PSA said headline inflation the rate of change in the average prices of goods and services typically purchased by consumers quickened to 2.5 percent in October from 2.3 percent in September.

This brings the year-to-date average rate to 2.5 percent, still within the government’s target range of two to four percent.

The PSA attributed the growth in consumer prices to upticks in food prices, particularly pork and fish.

It said fresh outbreaks of African swine fever (ASF) monitored in several provinces, mostly in Luzon, tightened the supply of pork in the National Capital Region (NCR) and surrounding areas, leading to a double-digit increase in prices.

National Statistician Dennis Mapa said the average price of pork meat with bones stood at P262 per kilogram in NCR markets in October compared with P202/kg in the same month last year, a 29 percent increase year-on-year.

The same was seen in provinces near NCR like in Pampanga where the cost of pork was P248/kg in October against P182/kg in the same month last year, an increase of 36 percent year-on-year.

Rice prices, on the other hand, remained on the decline nationwide but prices in NCR grew at a faster pace of 1.9 percent in October from 1.6 percent in September. Mapa said this could be attributed to the low supply of regular-milled and well-milled rice.

He said the inflationary effects of the recent typhoons on food prices can be expected to be reflected in the November headline rate.

With the upturn in October, however, Mapa said the movement in the food index is now on an upward trend toward the end of the year.

“With inflation in the food group, there is already an (upward) turn this month. It depends on the supply. And if we continue experiencing the same situation then we can expect an upward trend in the food and non-alcoholic beverages index,” said Mapa.

Faster growth was also seen in the index of Restaurant and Miscellaneous Goods and Services to 2.4 percent in October from 2.3 percent in September, driven by the increase in barbershop services.

Mapa attributed this to increases in charges to recoup additional costs such as personal protective equipment.

Increases in tuition in private secondary schools and private tertiary schools also caused the education index to rise to 1.2 percent in October from one percent in September. This, however, was still slower than the 4.6 percent growth in the index in October 2019.

Inflation rose faster both in NCR and Areas Outside NCR at 2.5 percent. The fastest growth in consumer prices was seen in Bicol region where the headline rate was above average at 4.1 percent in October from 4.5 percent in September.

Mapa attributed this to the high cost of transportation in the region. Tricycle fares have risen by 123 percent year-on-year while fares for jeepneys and buses have risen by 33.5 percent and 16.1 percent, respectively.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said inflation could still pick up this month because of the storm damage on agriculture and food supply as well as increased demand leading up to the holiday season.

He noted that average inflation for 2020 could be at 2.4 percent to 2.5 percent, making further monetary policy easing still possible to support economic recovery.

Acting Socioeconomic Planning Secretary Karl Chua said support to the agriculture sector is needed because of the continued presence of ASF in the country, which has resulted in tighter supply and higher prices of pork in Luzon.

“The government will strictly implement biosecurity measures and food safety protocols to curb the spread of animal diseases in farms and guarantee safe consumption of meat products,” he said.