Inflation slows in Oct as food prices decline
INFLATION markedly slowed last month as prices of key food items fell, the government reported on Tuesday.
October’s 4.9-percent result, down from September’s 6.1 percent, snapped a two-month run of consumer price hikes that began in August and was also lower than the 7.7 percent posted a year earlier.
It was much lower than the 5.1-5.9 percent estimated by the Bangko Sentral ng Pilipinas (BSP) for the month and the 5.4-percent median in a Manila Times poll of economists.
“The downtrend … was primarily brought about by the slower year-on-year increase in the heavily weighted food and nonalcoholic beverages at 7.0 percent in October 2023 from 9.7 percent in the previous month,” the Philippine Statistics Authority (PSA) said in a statement.
Food and alcoholic beverages accounted for a little over half — 53.7 percent or 2.6 percentage points — of overall inflation.
Food inflation, in particular, fell to 7.1 percent from 10.0 percent in September, which the PSA primarily attributed to a sharp deceleration in price growth — to 11.9 percent from 29.6 percent — for vegetables, tubers, plantains, cooking bananas and pulses.
Rice inflation, which was a main driver of September’s inflation spike, saw price growth slow to 13.2 percent from 17.9 percent.
Restaurants and accommodation services, which had a 12.3-percent or 0.6-percentage point share, also contributed to the overall drop in October with inflation in this category easing to 6.3 percent from 7.1 percent.
These more than offset a slight inflation rise for housing, water, electricity, gas and other fuels to 2.6 percent from 2.4 percent a month earlier. This commodity group was the third-biggest contributor to overall inflation with an 11.3-percent or 0.6-percentage point share, the PSA said.
Core inflation, which excludes volatile food and energy items, further decelerated in October to 5.3 percent from the 5.9 percent seen in the previous month and a year earlier.
Year to date, overall inflation rate reached 6.4 percent, still well over the BSP’s 2.0- to 4.0-percent target. Core inflation, meanwhile, averaged 7.0 percent.
Govt pledges continued support
Socioeconomic Planning Secretary Arsenio Balisacan, in a separate statement, said the government would continue supporting vulnerable sectors, especially with the El Niño weather pattern expected to linger up to the middle of 2024.
The country is currently experiencing a mild El Niño, the National Economic and Development Authority (NEDA) said, but this is expected to strengthen moving forward. The weather pattern will lead to below-normal rainfall that is likely to weigh on agricultural output.
The NEDA chief noted that the Social Welfare department was piloting a food stamp program and that the Economic Development Group had recommended extending the reduced Most Favored Nation tariff rates up to the end of next year, subject to a midyear review.
“While we are providing short-term measures to address effects of inflation through subsidies and importation, we also need to address long-standing challenges in agriculture and food supply chain, and help our local farmers boost their productivity and resilience through investment in irrigation, flood control, supply chain logistics and climate change adaptation,” Balisacan said.
In Malacañang, NEDA Undersecretary Rosemarie Edillon said that it was crucial to continue monitoring prices amid global challenges such El Niño and geopolitical uncertainties
She said that President Ferdinand Marcos Jr. had directed concerned government agencies to intensify support to provinces less affected by the El Niño phenomenon to increase food production.
Edillon said the government was prioritizing the safety of overseas Filipino workers (OFWs) as well as energy conservation in case the Israel-Hamas war escalates.
“Right now, the consensus is that it will be contained — that’s the general consensus,” she told reporters.
“But in the event that it escalates, again, we are very clear with regard to our priorities,” she said in English and Filipino.
“Number one is to make sure that our OFWs there are safe; that we can bring them back safely. And then, number two, we’ve discussed also the need for energy conservation measures, beginning with those in government.”
WITH A REPORT FROM CATHERINE S. VALENTE
