Manila - The Philippine Statistics Authority (PSA) reported on Tuesday that headline inflation in the Philippines eased to 4.9 percent in October, down from 6.1 percent in September. This marks a significant decrease from the 7.7 percent inflation rate recorded in October last year. Core inflation, which excludes volatile items like oil and food, also saw a decline, dropping to 5.3 percent from 5.9 percent in the previous month.
According to Philippines News Agency, the decline in inflation was largely attributed to a slower year-on-year increase in food and non-alcoholic beverages, which rose by 7.0 percent in October compared to 9.7 percent in September. The deceleration was driven by lower annual growth in vegetables, tubers, plantains, cooking bananas, and pulses, which increased by 11.9 percent in October, down from 29.6 percent in September. Other food groups, including flour, bread, meat, seafood, sugar, confectionery, desserts, and ready-made food, also saw lower year-on-year growth rates. Notably, rice inflation slowed to 13.2 percent, with the price of regular-milled rice dropping to PHP45.40 per kilogram from PHP47.50 per kg in September. Similarly, the price of well-milled rice decreased to PHP51 per kg from PHP52.70 per kg.
Mapa expressed optimism about the inflation outlook, suggesting that it might continue to decrease in the coming months, barring any supply shocks. The downward trend in inflation was also reflected in the restaurant and accommodation services sector, where the rate decreased to 6.3 percent in October from 7.1 percent in September. The year-to-date headline inflation settled at 6.4 percent, while core inflation was at 7.0 percent.
In the National Capital Region (NCR), inflation also decelerated to 4.9 percent from 6.1 percent in September. Similarly, for areas outside NCR, headline inflation slowed down to 4.9 percent in October from 6.0 percent the previous month. Inflation for the bottom 30 percent of households eased to 5.3 percent from 6.9 percent in September.
The National Economic and Development Authority (NEDA) emphasized the importance of continuing to monitor commodity prices, particularly food, transportation, and energy, in light of global challenges such as geopolitical uncertainties and the ongoing El Niño. NEDA Secretary Arsenio Balisacan highlighted the government's commitment to supporting the most vulnerable sectors, especially with the expectation that El Niño may affect local and global food production into mid-2024. The Department of Social Welfare and Development (DSWD) is implementing the Food Stamp Program (FSP), set to be scaled up in mid-2024. The Economic Development Group has also recommended extending reduced tariff rates under EO No. 10 (s. 2022) until the end of 2024, with a midyear review.
Balisacan stressed the need for long-term measures to enhance agriculture and the food supply chain, suggesting investments in irrigation, flood control, supply chain logistics, and climate change adaptation to boost the productivity and resilience of local farmers.