Economists expect price increases for necessary goods and services to slow down for October due to lower oil prices and relatively better weather conditions last month.

A DAILY TRIBUNE poll of analysts over the weekend yielded a median estimate of 5.6 percent for October inflation, within the 5.1 to 5.9 percent forecast given by the Bangko Sentral ng Pilipinas (BSP) last week.

If realized, the median estimate will be lower than the 6.1 percent print in September 2023.

The Philippine Statistics Authority (PSA) will report the consumer price index (CPI) data for October on 7 November (Tuesday).

Chinabank's chief economist, Domini Velasquez, expects a slower headline inflation rate in October due to lower prices of essential food items such as rice, meat, and vegetables, as well as declines in domestic fuel prices.

However, she noted the upward pressures from price gains for fish and fruits, the recent P1 jeepney fare hike, higher LPG prices, and increased electricity rates in areas served by Meralco and in Batangas.

Despite the factors, Velasquez said the core inflation continued downward to 5.2 percent from 5.9 percent.

"We anticipate inflation to slow for the remainder of the year, barring new shocks. Easing price pressures could hold off additional rate hikes from the BSP," she said.

"Inflation will likely reach the BSP's 2 to 4 percent target range in the first quarter of 2024 before returning above target for a few months through July due to base effects," she added.

Security Bank chief economist Robert Dan Roces said inflation slowed last month amid continuously high food prices. Still, a drop in oil prices also helped in the decline.

He said that the most recent data showed that the prices of essential foods like rice, meat, and vegetables had gone down and that the costs of electricity and gas had also decreased in October.

"While these factors could alleviate inflationary pressures, they may not be substantial enough to warrant diminished vigilance from the central bank given upside risks," Roces said.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the inflation declined last month as the larger base effects from a year earlier led to weaker year-on-year headline inflation in the fourth quarter.

Ricafort said the palay harvest season from mid-September to October increased local palay and rice supply, stabilizing or even lowering local palay prices, which made up roughly 9 percent of the CPI basket.

"Relatively better weather conditions so far in October 2023 compared to some storm damage from late July to September 2023 could have helped stabilize food prices, such as vegetables and other agricultural products, since food accounts for more than one-third of the inflation basket," Ricafort said.

DBS Bank senior economist Radhika Rao believes the inflation slowed down last month based on base effects with a steady pace of month-on-month rise.

"Even as BSP expressed caution over growth, pipeline inflation risks by way of minimum wage increases, higher utilities and transport fares, a weak peso pose imported price pressures, which will keep the BSP hawkish in the final quarter of the year," Rao said.

Rao said that the government's move in early October to temporarily raise jeepney fares in the Philippines made things even worse.

Philippine National Bank economist Alvin Arogo said inflation remained above the BSP's target range of 2 percent to 4 percent, mainly because of higher jeepney fares and the minimum wage.

"Our baseline estimates show that due to persistent supply issues and second-round effects, inflation might continue to be above the four percent mark until (third quarter of 2024)," Arogo said.