INFLATION accelerated to a five-month high in October as food costs increased after storms Ondoy and Pepeng destroyed crops, fish pens, roads and bridges.
Consumer prices rose 1.6 percent from a year earlier after a 0.7-percent gain in September, the National Statistics Office said yesterday.
Still, the average inflation rate during the first 10 months was 3.2 percent, which remained within the 2.5- to 4.5-percent forecast by the Development Budget Coordination Committee, acting Economic Planning Secretary Augusto Santos said.
“The central bank may raise interest rates earlier than expected, sometime in the first half of 2010” amid growing inflation risks, said Emilio Neri, an economist at Bank of the Philippine Islands.
“The increase in food prices is not expected to last. Oil prices are the bigger worry.”
The Philippines imports almost all its oil, and the price of the commodity has risen almost 80 percent this year. Crude oil rose above $80 a barrel for the first time in a year last month.
The inflation rate advanced with the increase in the food, beverages and tobacco index, the statistics office said. The index rose 3.7 percent in October from a year earlier, quickening from 2.2 percent in September.
The Bangko Sentral raised its inflation forecast for this year to 3.28 percent and next year to 4.02 percent. The 2011 forecast was 3.4 percent, Deputy Governor Diwa Guinigundo said.
Prices of commodities rose despite the price freeze that the Arroyo administration had ordered to shield typhoon victims from higher food costs.
“Prices of fruits and vegetables increased by 8.4 percent last month compared to levels recorded in September because storms Ondoy and Pepeng left major agricultural towns with damaged crops,” said Santos, who is also director general of the National Economic and Development Authority.
“Pepeng devastated farms in Benguet, the country’s main source of vegetables, limiting the volume of deliveries and pushing prices up in Metro Manila and in [other] regions.”
Prices of pork and fruits were higher “in selected regions including the National Capital Region, resulting in a 0.6-percent uptick in the month-on-month inflation rate at the national level in October from 0.2 percent in September,” the statistics office said.
Prices of amargoso, cabbage, Baguio beans and eggplant increased by more than 50 percent from their levels in September, data from the Bureau of Agricultural Statistics showed.
The tight supply of pork, chicken and beef pushed prices by 1 percent, the agency said.
The 12.1-percent increase in water rates last month also helped push consumer prices higher. But that was tamed by a 6.6-percent decline in the cost of fuel, a 5.1-percent drop in electricity rates, and a 7.3-percent reduction in transportation and communication costs.
On the whole, core inflation, which excludes food and energy prices, slowed down to 2.7 percent in October from 2.8 percent in September and 7.8 percent a year earlier. With Bloomberg
