Inflation this November could slightly increase up to 2.5 percent from 2.3 percent in October due to stable prices of most goods despite recent bad weather and geopolitically-driven trade disruptions, Rizal Commercial Banking Corporation chief economist Michael Ricafort said Saturday.

Ricafort said rice prices will continue to temper growth in overall inflation as the country receives cheaper imports of this commodity under the government’s implementation of a lower tariff at 15 percent from 35 percent.

“Rice prices account for 9 percent of the entire basket of goods. The lower tariff translates to an outright discount of 20 percent for consumers,” he said.

Ricafort added global prices of most commodities remained low as industries raised production amid better weather conditions.

“World prices declined to 2.5-year lows in recent months, down from the 15-year highs seen in July, with the drought or El Niño coming to its end,” he said.

Countries around the world, Ricafort said, have shown weaker demand for oil which continues to bring relatively low prices of fuel and other commodities to domestic markets.

“Oil prices are still near 3-year lows while other commodity prices have settled among the lowest in three to four years amid softer economic data in China, the world’s second-biggest economy and the biggest importer of oil and other goods,” he said.

Upside risks

Ricafort said overall inflation will likely inch up as recent typhoons disrupted production activities and delivery of goods.

“Floods reduced agricultural output and could lead to some pickup in overall prices until the supply value chain normalizes,” the economist said.

The National Disaster Risk Reduction and Management Council reported typhoons “Nika,” “Ofel” and “Pepito” this month caused agricultural and infrastructure damage amounting to over 478 million.

Ricafort added the recent peso depreciation against the US dollar likely pushed up prices of imported goods.

The local currency depreciated on Friday to P58.87 per dollar from P59 per dollar on Thursday, the weakest level for the peso this week based on data from the Bankers Association of the Philippines.

The last time the peso hit the 59 level was September 2022.

Ricafort said consumers might continue to see high prices of some food items as weather forecasts point to more rainy days.

“Risks of La Niña are expected to last until the first quarter of 2025 which means more damage to crops and higher food prices,” he said.

Ricafort added prices of other goods and services will likely increase as businesses accommodate more orders from consumers who will be preparing for the holiday activities.

“Seasonal increase in consumer spending for Christmas would also lead to some pickup in overall inflation, but will go down upon crossing the New Year’s Day,” he said.