The moderating forces in the October inflation print include the drop in the price of food and non-alcoholic beverages and the decline in transport prices.

Food inflation posted a negative growth of 1.3 percent in October. roman prospero

Inflation, or the rate of change in prices, fell further to only 0.8 percent in October, National Statistician Claire Dennis Mapa said on Tuesday.

“Headline inflation at the country level continued to ease to 0.8 percent in October 2019. Inflation in September 2019 was higher at 0.9 percent and in October 2018, 6.7 percent,” Mapa said.

This translates to a 43-month low since the inflation print stood at 0.7 percent in April 2016.

The moderating forces in the October inflation print include the drop in the price of food and non-alcoholic beverages and the decline in transport prices.

But analysts at J. P. Morgan, citing the 0.2 percent seasonally adjusted month-on-month October inflation print, said the over-year-ago trend “likely bottomed in October owing to fading base effects, and should rise henceforth, leaving overall CPI (consumer price index) to sit comfortably in the central bank’s 2 to 4 percent target range through next year.”

In the details, food and non-alcoholic beverages costs were up 0.2 percent m/m, sa, following four consecutive prints of negative month-on-month growth rates. This was in part driven by increases in vegetables and fruits prices, up 3.2 percent m/m, sa, and 1.7 percent m/m, sa, respectively. Education costs were similarly up 0.2 percent m/m, sa, and 11.2 percent 3m/3m, seasonally-adjusted annual rate or saar, in October.

According to Mapa, food inflation posted a negative growth of 1.3 percent during the month, wherein, rice posted the biggest dip with 9.7 percent. This brings the negative growth for the staple for six consecutive months.

Electricity, LPG and kerosene price reductions likewise tempered the headline rate as prices contracted 5.4 percent, 10.6 percent and 9.9 percent respectively.

The PSA chief noted the sustained uptrend in meat prices, particularly on chicken and beef, contributed to the latest inflation print as consumers shift to these products given the uncertainty on pork sources infected with African swine fever.

“We are seeing an upward trend particularly in the price of chicken. For meat overall…it’s like a shift. Right now, it’s clear in the NCR (National Capital Region) and Region 3,” Mapa explained.

“Pork is declining. Right now, prices of chicken and beef generally, are (rising),” he added.

On a cumulative basis, inflation in the first ten months of the year now stands at 2.6 percent, well within the government’s 2 to 4 percent target.

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno acknowledged these developments, saying their projections proved in sync with the actual figures.

“October inflation of 0.8 percent is in line with BSP’s forecast of better than expected average inflation rate for 2019. (Also, it) was within the BSP’s forecast range of 0.5 to 1.3 percent,” Diokno said in a text message.

He expressed confidence the government inflation target will be achieved not only for this year but until 2021 as well.

“The BSP expects average inflation to firmly settle within the target range of (2 to 4 percent) for 2019 to 2021.