MANILA – The decline in the country’s inflation numbers in October did not come as a surprise because of the series of modest oil price rollbacks, coupled with less price pressures on heavily-weighted food items, an economist in the academe said.
The Bangko Sentral ng Pilipinas (BSP) reported that headline inflation dropped to 4.9 percent year-on-year last month from 6.1 percent in September, falling below its forecast range of 5.1 to 5.9 percent for the month.
In an interview on Wednesday, Carlos Manapat, economics department chair at the University of Santo Tomas (UST), said the main contributors to inflation earlier this year have either resolved themselves or have been addressed through government intervention.
These include a rise in world crude prices following conflicts between countries –which caused local pump prices to spike and shortages in staple food commodities– which led to price surges at the retail end.
Manapat said price caps imposed on regular-milled and well-milled rice helped ease price pressures on the Filipino’s staple food as it showed the market that the government was willing to intervene in times of abnormal price surges.
“Oil prices didn’t move too much last month and there were no drastic surges in food prices either. I would consider the 4.9 percent inflation in October as somewhat average and nothing like the high inflation we experienced early this year,” Manapat told the Philippine News Agency.
However, Manapat said inflation numbers are likely to pick up again in December.
He described this as a “cyclical spike” fueled by the release of employees’ bonuses, which trigger the usual Christmas season buying spree.
Also adding to the public’s greater disposable income during the holidays is the increase in foreign remittances, as relatives abroad send in their Christmas gifts in cash – further fueling consumer spending and aggravating inflationary pressures.
Any increases in wages and transport fares to be implemented in the fourth quarter will also contribute to an uptick in inflation before yearend, Manapat added. (PNA)