Year-on-year headline inflation rose to 2.5 percent in October from 2.3 percent in the previous month and was within the BSP’s expected range of 1.9-2.7 percent for the month.
The resulting year-to-date average inflation rate of 2.5 percent was within the Government’s target range of 3.0 percent ± 1.0 percentage point for the year.
By contrast, core inflation—which excludes selected volatile food and energy items to measure underlying price pressures—eased to 3.0 percent year-on-year in October from 3.2 percent in September.
Meanwhile, month-on-month seasonally-adjusted inflation increased to 0.4 percent in October from nil in the previous month.
Higher headline inflation was traced mainly to faster price increases for selected food items.
Meat inflation went up as pork prices increased due to some tightness in supply brought about by the African Swine Fever.
At the same time, fish inflation also increased as adverse weather conditions limited the supply of fish.
The increase was slightly tempered by the slowdown in non-food inflation as year-on-year transport inflation eased in October owing to the rollback in gasoline and diesel prices, and as water rates declined during the month.
The latest inflation outturn remains consistent with the BSP’s prevailing assessment of benign inflation dynamics over the policy horizon.
The overall balance of risks to future inflation continues to lean toward the downside owing mainly to the risk of potentially deeper disruptions to domestic and global economic activity caused by the pandemic.
The Monetary Board will consider the latest inflation developments and outlook, including the upcoming release of the Q3 2020 GDP data at its scheduled monetary policy meeting on 19 November 2020.
Looking ahead, the BSP remains watchful over inflation and output developments and stands ready to take policy actions as needed to ensure price stability conducive to sustainable economic growth.
