The Finance Department expects the inflation rate to rise to 2.5 percent in October following the spike in basic food prices and base effects.
Finance Undersecretary Gil Beltran said in an internal economic bulletin inflation might rose to 2.5 percent in October, higher than the 18-month high 2.3 percent in September and 0.4 percent in the same month in 2015.
“Just like last month, the apparent surge in inflation rate is the result of base effects. October last year registered inflation rate of 0.4 percent,” Beltran said in a report.
The expected uptick would peg the 10-month inflation rate at 1.6 percent, still below the inter-agency Development Budget Coordination Committee’s target range of 2.0 percent to 4.0 percent.
“The benign inflation will continue to support economic growth and steel the economy from external volatilities,” Beltran said.
Index heavyweights non-alcoholic beverages and food may rise to 3.3 percent in October from 3.1 percent, while prices of alcoholic beverages and tobacco could increase 6.5 percent from September’s 6.2 percent.
The prices of clothing and footwear may increase from 2.7 percent in September to 2.8 percent; furnishings, households equipment from 2.3 percent to 2.4 percent; and recreation and culture from 1.7 percent to 1.8 percent.
Housing, utilities and fuels could also rise from 0.9 percent to 1.1 percent this month; and transport from 0.2 percent to 0.6 percent.
Health (2.7 percent), restaurant and miscellaneous services (2.4 percent), education (1.8 percent), and communication (0.1 percent) will remain from their levels from the previous month.
The rate of Manila Electric Co. in the four weeks of October for those with an average consumption of 300 kilowatts dipped to P8.65 per kilowatt hour from P8.77 in September and P8.74 a year ago.
Meralco’s generation rate per kwh also fell to P3.89 during the month from P3.94 in September and P4.0 in the previous year.
Meanwhile, the average price of diesel in Metro Manila rose to P28.04 per liter from P25.74 in the previous month and P26.89 in the same month last year.
The average price of gasoline in the first four weeks of October increased to P42.27 per liter from P37.83 in September and P41.7 a year before.
Beltran said in an earlier economic bulletin that inflation would likely remain above 2.0 percent in the short-term owing to higher commodity costs, noting that core inflation rose at a faster rate from August to September, signaling the possible spike in consumer prices in the coming months.