Headline inflation in October was steady at 2.3 percent year-on-year from the previous month’s level and was within the BSP’s forecast of 1.9-2.7 percent for the month. The resulting year-to-date average inflation rate of 1.6 percent was still below the Government’s inflation target range of 3.0 percent ± 1.0 percentage point for 2016. Likewise, core inflation, which excludes certain volatile food and energy items to measure underlying price pressures, also remained unchanged at 2.3 percent in October. Meanwhile, month-on-month seasonally-adjusted headline inflation rose to 0.3 percent in October from 0.2 percent in September.
Inflation pressures in October can be attributed to higher price increases of selected food items as weather-related production disruptions post-typhoons “Karen” and “Lawin” pushed up inflation of food products such as, vegetables and fruits. This was slightly offset by the slower price increases of meat and fish during the month. At the same time, inflation readings for most non-food subcomponents were also unchanged from the previous month’s level.
Governor Amando M. Tetangco, Jr. noted that the latest inflation outturn remains consistent with the BSP’s assessment that inflation will gradually move towards the target range over the policy horizon. Looking ahead, the BSP will continue to pay close attention to evolving price and output developments to ensure that the monetary policy stance remains consistent with price and financial stability.