BSP: Oct inflation could top 8%
Consumer price growth may have accelerated to a more than three-year high in October, potentially breaching 8 percent as higher domestic energy prices and transport fares drove up the cost of living.
In a statement on Friday, the Bangko Sentral ng Pilipinas (BSP) said inflation likely ranged from 7.1 percent to 8.1 percent during the month.
The lower end of the forecast suggested that inflation may have eased slightly from September’s 7.2 percent.
But the upper end pointed to a possible acceleration to its fastest pace since February 2023, when inflation reached 8.6 percent.
The Philippine Statistics Authority will release the October inflation data on Nov. 5.
“Upward price pressures are likely to come from higher prices of domestic fuel, electricity and transport fares,” the central bank said.
“These pressures could be partially offset by lower prices of key agricultural commodities, such as rice, vegetables, meat and fish, owing to favorable supply conditions,” it added.
On Oct. 22, a “strong majority” of the BSP’s Monetary Board decided to raise the policy rate by half a percentage point to 5.5 percent, citing the need for a stronger response to stubbornly high inflation.
The move surprised markets, with only two of the 20 economists polled by the Inquirer having anticipated an increase of that size.
The BSP expects inflation to average 6.1 percent this year, considerably above its 3-percent target.
It further raised its inflation forecast for 2027 to 6 percent from 5.4 percent, though it expects price growth to ease to 3.3 percent in 2028.
BSP Governor Eli Remolona Jr. said policymakers were concerned about elevated oil prices, the risk of sharp wage increases and potential food supply disruptions stemming from the ongoing El Niño episode.
A weakening peso was another concern, he said, as a sharp depreciation could add to inflationary pressures.
Remolona said growth could recover by the first quarter of 2027.
The Philippine economy expanded by just 2.6 percent in the first half of this year, weighed down by a major corruption scandal and a war-driven surge in prices.
“The BSP will remain vigilant and guided by incoming data, particularly on inflation and growth prospects,” the central bank said. “It will continue to assess the impact of the latest developments in the Middle East on the country’s inflation and economic outlook.”
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