DOF sees October inflation at 2.5%

The rate of increase in consumer prices may likely grow at a faster pace this month because of base effects, but will still remain within the government's target, the Department of Finance (DOF) said today.

Based on the Economic Bulletin submitted to Finance Secretary Carlos Dominguez III, inflation is seen to settle at 2.5 percent in October, up from 2.3 percent in the previous month and 0.4 percent a year ago.

Finance Undersecretary Gil Beltran attributed the increase mainly to base effects.

"Just like last month, the apparent surge in inflation rate is the result of base effects. October last year registered inflation rate of 0.4 percent," Beltran said in the report.

The expected uptick would peg the 10-month inflation rate at 1.6 percent, still below the inter-agency Development Budget Coordination Committee (DBCC)'s target range of 2.0 percent to 4.0 percent.

"The benign inflation will continue to support economic growth and steel the economy from external volatilities," Beltran said.

In October, index heavyweights non-alcoholic beverages and food may rise to 3.3 percent from 3.1 percent, while prices of alcoholic beverages and tobacco could grow 6.5 percent from September's 6.2 percent.

Likewise, prices of clothing and footwear may increase from 2.7 percent in September to 2.8 percent; furnishings, households equipment may jump from 2.3 percent to 2.4 percent; and recreation and culture from 1.7 percent to 1.8 percent.

Housing, utilities and fuels could also increase from 0.9 percent to 1.1 percent this month; and transport from 0.2 percent to 0.6 percent.

Lastly, health (2.7 percent), restaurant and miscellaneous services (2.4 percent), education (1.8 percent), and communication (0.1 percent) would remain at their same levels from the previous month.

In the first four weeks of October, Manila Electric Co.'s (Meralco) rate per kilowatt hour (kwh) for an average of 300 kilowatts-per-month consumption dipped to P8.65 from P8.77 in September and P8.74 a year ago.

Meralco's generation rate per kwh also fell to P3.89 during the month from P3.94 in September and P4.0 in the previous year.

Meanwhile, the average price of diesel in Metro Manila among the "big three" oil companies accelerated to P28.04 per liter from P25.74 in the previous month and P26.89 registered in the same month last year.

Average price of gasoline in the first four weeks of October also increased to P42.27 per liter from P37.83 in September and P41.7 a year before.

Beltran said in his earlier economic bulletin that inflation would likely remain above 2.0 percent in the short-term owing to higher commodity costs, noting that core inflation rose at a faster rate from August to September, signalling the possible spike in consumer prices in the coming months.

Source: Philippine Information Agency

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