towards Katherine K. Chan
Inflation in the Philippines is likely to have slightly accelerated in October Raised prices of food, fuel and electricity and a weak peso, a bearish analyst said.
A Businessworld A poll of 17 analysts gave an average estimate of 1.8% for the consumer price index in October. If inflation is detected in October, it would be a slight pick-up from the 1.7% clip in September but down from the 2.3% seen in the same month last year.
Median estimates also fall within the bangko sentral ng pipipinas’ (BSP) 1.4-2.2% October weather.
It could also be the fastest clip in eight months or so from 2.1% in February and could correspond to 1.8% in March.
October would likewise mark the eighth consecutive month that inflation has undershot the BSP’s 2-4% target.
Philippine Statisticians are scheduled to release Octhofalition data in Nov. 5.
Aris D. DACANAY, Economist for Southeast Asia at HSBC Global Investment Research, said inflation on October 1 as vegetable prices rose following the hurricanes.
“Electricity prices also increased as the depreciation of the peso against the US dollar led to higher generation charges,” he added.
Manila Electric CO moved the total electricity rate by P0.2331 per Kilowatt hour (kWh) to P13.3182 per kWh in October.
Moody’s Analytics Oplomist Sarah Tan said it has raised travel costs again Fuel prices may also have a contribused for rapid depreciation in October.
“Higher costs and fuel costs, as well as weather-related disruptions affecting food supplies, are putting moderate pressure on prices,” he said in an email.
In October, the price adjustment at the pump stood at an increase of P1.80 per liter of gasoline, P2.10 per liter of diesel and P1.10 per liter of kerosene.
“Fuel prices also remained stable; world oil prices cooled in October, reducing any inflationary impact brought about by the weak peso,” said Mr. Dacanay.
In October, the peso weakened against the greenback at P58.850 per dollar, falling by 65.4 centavos from P58.4 centavos from P58.46 from P58.196 ending last – September. The peso also hit an all-time low of P59.13 to the Greenback on Oct 28.
“The low price pressures persisted again (in October), a very large amount of cool rice.
Bank of The Philippine Islands is headed by Emilio S. Neri, Jr. He said the low prices of meat, fruit and oil are likely to prevent further acceleration of inflation.
“Going forward, long-term risks and inflation are building as the positive effects of basic rice wear off and the extension of the suspension of re-importation of rice exerts more pressure,” said Mr Neri.
President Ferdinand R. Marcos, Jr. earlier ordered a 60-day suspension of rice imports beginning September 1 to support Filipino prices during the harvest and to stabilize prices.
The moratorium was originally supposed to end on November 2 but is now expected to be extended until the end of 2025. The ban applies only to the import of regular regular rice.
A sticky smile
Meanwhile, core inflation is expected to remain “sticky,” the analyst said.
“That is driven in part by strong inflation expectations and recent wage increases. In addition, the peso has weakened significantly since June, eating into firms’ allowances to reflect higher costs,” Ms Tan said.
Inflation, which excludes volatile food and fuel prices, eased to 2.6% in September from 2.7% in August. It averages 2.4% over the nine-month period, up from 3.1% in the same period last year.
Union Bank of the Philippines Chief Carlo O. Asuncion said in an email that he expects core inflation to stay close to that level in October.
“This attachment implies the desired side pressures and second round effects (eg
Security Bank Chief Calist Economist Teaningco said in an email that Core Inflation will continue to rise in the coming months amid holiday-driven spending.
Meanwhile, Maybank economist Azril Rosli said headline inflation could remain between 2.5% and 3% until December.
“(This is due to the Holiday Seavity Market Strengthening, Annual Extinction Financial Cycles Including Internet Operating Expenses, Annual Expenditure Continued in Pharmaceutical Expenditures,” he said in an emailed note to Anp.
below 2%
Despite the rosy risks, analysts still expect inflation to settle below the central bank’s target band.
“Looking ahead, inflation is expected to remain under control, coming in below the BSP’s 2-4% target this year and hovering around the middle of the target range next year,” Chinabank Research said via email.
If 1.8% of the Median rated Mediate items, the drop in head power is an average of 1.7% over a 10-month period, matching the annual BSP target.
In 2026, the central bank sees inflation accelerating to 3.1%, before slowing to 2.8% in 2027.
“Even with small upticks in Q4, inflation is likely to remain below the BSP’s 2-4% target range, better domestic food supply, improved policy support and policy demand conditions.
This expectation gives the central bank room to continue its monetary policy until searlend and possibly 2026, said the analyst.
“We do not expect the central bank to deviate significantly from its planned monetary policy, especially if economic growth remains muted,” Reinielle Matt M. Erece, economist at Oikonomia Advisory & Research, Inc., said in a Viber message.
Last month the Monetary Board cut the Benchmark Personal Policy Rate by 25 basis points (BPs) to 4.75%, the lowest in three years. This brought its cumulative reduction to 175 bps since it began tapering in August 2024.
BSP Governor Eli M. Remolona, Jr. He has insisted on one of the 25-BP cut at the last meeting of the Board of Finance this year on December 11 and the one that could exist in 2026 as he wants to support the sentiments of the weak business because of the bankruptcy of the floods.
“Looking beyond DECEMBER, the BSP can still deliver several more cuts in 1h 2026 if growth continues to run below potential,” said Mr Neri. “The Central Bank is likely to adjust its policy approach to the Federal Reserve, especially if the markets begin to limit the rate of the US rate after the end of the Powell Chair in May 2026.”
Last week, the Fed delivered its second 25-BP cut this year, bringing its interest rate to the 3.75-4% range. This brought its cold cuts from September 2024 to 150 bps.
However, Fed Chair Jerome H. Powell signaled a pause at their next rate-setting meeting this year, citing risks from the unavailability of economic data due to the ongoing US government shutdown.
