Economists project a higher inflation this month at 2 to 3 percent mainly due to weaker peso and weather disruption to business activities caused by severe tropical storm “Kristine.”

In September, overall inflation dropped to 1.9 percent from 3.3 percent in August as prices of rice, utilities and fuels decreased. Rice posted the biggest decline at 5.7 percent from 14.7 percent.

Rizal Commercial Banking Corp. chief economist Michael Ricafort sees October inflation to settle at 2.4 percent as prices of some goods might increase after the typhoon damaged roads, facilities, electricity lines, and farms in Luzon and Visayas.

“Flood damage in hard-hit areas due to severe tropical storm ‘Kristine’ could cause some temporary increase in prices until supply chains normalize,” he said in a Viber message.

The National Disaster Risk Reduction and Management Council reported 158 areas have been declared under state of calamity by the local government units as the storm last week destroyed infrastructure and agricultural goods amounting to P825 million and P1.4 billion, respectively.

However, Ricafort still expects a small increase in overall inflation due to price freeze in heavily storm-hit areas which extends to the next months or for 60 days.

University of the Philippines Economics professor Ramon Clarete added food prices will remain broadly stable due to sufficient food supply, following the end of El Niño in June.

“Food production due to the latest extreme weather isn’t yet a factor,” he said.

Clarete did not give a specific figure but said October’s overall inflation will settle close to 2 percent or within the 2 to 4 percent target of the Bangko Sentral ng Pilipinas.

Ricafort also said global oil prices remained low over three weeks and in the first nine months as supply and demand for the commodity continued to be balanced.

No drastic oil price changes

Clarete said there has been no drastic change in oil prices this month, even with the renewed missile attacks between Israel and Iran, a member of the Organization of the Petroleum Exporting Countries (OPEC).

“Oil price increases are moderate due to the US being a big player and not an OPEC player,” he said.