By Ditas Lopez
The Philippines’ annual inflation in October accelerated to its quickest pace in almost 14 years, driven mainly by higher food costs, opening the door for sustained tightening by the central bank.
Consumer prices rose 7.7% from a year ago last month, fastest since December 2008, the Philippine Statistics Authority reported Friday. October’s print was also faster than the median estimate of 7.1% in a Bloomberg survey and higher than any of the forecasts.
Core inflation, which strips out volatile commodities, was 5.9% in October.
With a “confluence of supply and demand side pressures” likely to push inflation higher and knock-on price pressures, said Nicholas Mapa, an economist at ING Groep NV. Bangko Sentral ng Pilipinas will “likely remain hawkish,” he said, forecasting another hike in December to match any move by the Federal Reserve.
What Bloomberg Economics Says...
“Red-hot Philippine inflation readings for October keep the pressure on Bangko Sentral ng Pilipinas to continue raising interest rates”
— Tamara Mast Henderson, Asean economist
Hours after the Federal Reserve raised policy interest rates by 75 basis points to arrest red-hot inflation, BSP Governor Felipe Medalla announced Thursday that the Philippines will match the increase on Nov. 17.
Farm damage caused by a recent typhoon could worsen price pressures.
©2022 Bloomberg L.P.