By Katherine K. Chan
PHILIPPINE HEADLINE inflation steadied in October as slower price increases in vegetables and meat offset higher utility costs through the month, the Philippine Statistics Authority (PSA) said on Wednesday.
PSA data showed that the buyer price index (CPI) stood at 1.7% in October, unchanged from September’s print but eased from 2.3% a 12 months ago.
This was a tad slower than the 1.8% median forecast from a BusinessWorld poll of 17 analysts conducted last week, but inside the Bangko Sentral ng Pilipinas’ (BSP) 1.4-2.2% forecast.
October also marked the eighth straight month that inflation fell below the central bank’s 2-4% goal band.
Within the 10 months to October, average inflation matched the BSP’s full-year goal of 1.7%.
Meanwhile, core inflation, which discounts volatile prices of food and fuel, eased to 2.5% from 2.6% in September. Still, it was barely faster than the two.4% print in October 2024.
This brought year-to-date core inflation to 2.4%, easing from the three.1% clip seen within the comparable year-ago period.
Housing, water, electricity, gas and other fuels contributed most to the CPI through the month and posted a 2.7% inflation rate, National Statistician Claire Dennis S. Mapa said.
Electricity alone posted a 4.1% inflation in October, accelerating from the 1.2% clip seen in September.
In October, the Manila Electric Co. hiked the general electricity rate by P0.2331 per kilowatt-hour (kWh) to P13.3182 per kWh. This means residential customers consuming 200 kWh needed to pay an extra P47 of their bill last month.
Meanwhile, inflation for water supply also quickened to five.7% in October from 5.3% a month earlier.
In September, the Metropolitan Waterworks and Sewerage System okayed the proposed P0.14 per cubic meter (cu.m.) hike for Maynilad and a P0.15 per cu.m. rollback for Manila Water for the October-December period.
Department of Economy, Planning, and Development Secretary Arsenio M. Balisacan said the federal government’s efforts to administer supply conditions and ensure price stability helped inflation hold regular in October.
“The regular headline inflation rate shows that our coordinated interventions are helping to keep up adequate supplies and keeping essential goods reasonably priced,” he said in an announcement. “We remain vigilant in managing risks from weather disturbances, global market volatility, and other domestic aspects that will affect prices in the approaching months.”
Meanwhile, slower inflation for food and non-alcoholic beverages tempered inflationary pressures in October.
The heavily weighted food and nonalcoholic beverage index eased to 0.5% in October from the 1% clip logged the month earlier.
“Our food basket, food and non-alcoholic beverages, has the most important weight within the inflation basket at 37.75% roughly,” Mr. Mapa said.
Food inflation slowed 12 months on 12 months to 0.3% from 0.8% the previous month and three% in October 2024.
This got here as inflation for vegetables, tubers, plantains, cooking bananas and pulses eased to 16.6% from 19.4% in September.
Likewise, the PSA recorded slower inflation for meat and other parts of slaughtered land animals in October at 5.2% from 6% a month ago.
Nevertheless, Mr. Mapa noted that inflationary pressures from food remain as prices of fish and other seafood picked as much as 8.2% from 7.9% in September.
RICE PRICES
Rice inflation remained within the negative for the tenth month in a row at -17% in October from -16.9% in September.
Mr. Mapa said rice prices continued to say no amid increased unmilled rice production within the last quarter of the 12 months.
“Our production is high, but in fact, prices on the earth market are also beginning to drop. So that really affected, in a superb manner, our retail rice prices, since it continues to say no,” he said in Filipino.
Citing PSA data, Mr. Mapa said a kilo of regular-milled rice was sold at a median price of P40.09 in October, dropping by 20.2% from P50.22 a 12 months ago. Well-milled rice was also cheaper at a median P46.49 per kilo, down 15.9% from P55.28 last 12 months. Meanwhile, special rice was priced at P56.39 per kilo last month, falling by 11.8% from P63.97 in October 2024.
“Despite the import ban on rice, the value of the grain was largely stable while meat and dairy prices eased, offsetting the rise in utility rates,” Aris D. Dacanay, economist for the Association of Southeast Asian Nations at HSBC Global Investment Research, said in an e-mailed note.
Earlier, President Ferdinand R. Marcos, Jr. ordered a 60-day freeze on regular and well-milled rice imports from Sept. 1 to Nov. 2 to support local farmers amid the harvest season and to stabilize rice prices.
The suspension has been prolonged until yearend, with the federal government eyeing to open an import window in January before reimposing the ban from February to April.
Meanwhile, PSA data also showed that inflation within the National Capital Region (NCR) picked as much as 2.9% in October from 2.7% within the previous month and 1.4% in the identical month in 2024.
Outside NCR, inflation eased to 1.3% from 1.5% in September and the two.6% clip a 12 months ago.
Central Visayas still saw the very best inflation print amongst other regions at 2.6%, while prices in Bangsamoro Autonomous Region in Muslim Mindanao declined the fastest at -1.3%.
Inflation for the underside 30% of income households declined at a faster pace of -0.4% in October from -0.2% in September. For the 10-month period, it averaged 0.3%, slower than 4.5% a 12 months ago.
INFLATION AHEAD
The BSP still sees inflation settling below its 2-4% goal by yearend, citing the recent easing of rice prices within the country.
“Inflation is projected to average below the low end of the goal range in 2025, primarily resulting from the easing of rice prices in previous months,” it said in an announcement. “The risks to the inflation outlook are limited as price pressures are expected to ease amid stabilizing global commodity prices.”
Nevertheless, the central bank said the outlook for domestic economic growth has weakened.
“This outlook reflects partially the impact on business confidence of governance concerns about public infrastructure spending. Indications of slowing demand also reflect lingering uncertainty from the external environment,” the BSP said.
For November, Mr. Mapa said fuel prices will likely drive up inflationary pressures following the newest pump price adjustment.
Oil firms within the country implemented fuel price hikes on Tuesday, amounting to P1.70 per liter for gasoline, P2.70 per liter for diesel and P2.10 per liter for kerosene.
Mr. Mapa said they’ll proceed to observe the impact of recent typhoons on consumer prices, in addition to Mr. Marcos’ earlier directive to impose a price freeze on basic and prime commodities until yearend.
“There are threats to overall food inflation. Some items are increasing, (reminiscent of) the value of fish (and) vegetable,” Mr. Mapa said, noting vegetable prices are sensitive to weather conditions.
In a note on Wednesday, Chinabank Research said inflation will likely remain low in the approaching months, but noted that pump price adjustments and the weather’s impact on food prices still pose risks.
“We expect overall inflation to stay low for the remainder of the 12 months, though upward price pressures may arise from energy — a hefty increase in local pump prices was announced this week — in addition to from weather-sensitive food prices,” it said.
Meanwhile, HSBC’s Mr. Dacanay said the benign inflation and clearer rice policies could push the BSP to chop rates by 25 basis points (bps) in December.
“All in all, we expect October inflation plus the clarity over rice policies strengthen the case for a December rate cut by the BSP,” he said. “With no issues in inflation, monetary policy has the runway to pump the economy to, hopefully, offset the fiscal fallout brought by a pointy drop in public infrastructure spending.”
Because it began its easing cycle in August 2024, the Monetary Board has cut its key policy rate by 175 bps to a three-year low of 4.75%.
BSP Governor Eli M. Remolona, Jr. has signaled further easing until early next 12 months to support the economy as the continuing flood control anomalies have hit business sentiment, clouding their growth outlook.
The Monetary Board will hold its last rate-setting meeting this 12 months on Dec. 11.