Philippine inflation may top 8% in October, BSP forecasts

Philippine inflation could climb above 8% in October, the Bangko Sentral ng Pilipinas said, forecasting a headline print of 7.1% to 8.1% as fuel, electricity and transport fares pushed prices higher.

The upper end of that range would be the fastest pace in nearly four years, since the 8.6% recorded in February 2023, and would mark a sharp acceleration from 1.7% in October last year. Even the lower end would keep inflation above the central bank's 3% target for an eighth straight month, though it would ease from September's 7.2% peak.

The BSP pointed to higher domestic fuel prices, a 31.91-centavo per kilowatt-hour increase in Manila Electric Co. rates to P15.0615, and approved fare hikes for public utility vehicles as the main upward pressures. Kerosene rose by as much as P4.57 per litre, while gasoline and diesel prices fell. Lower prices for rice, vegetables, meat and fish on favourable supply conditions likely offered partial relief, the central bank said.

The Philippine Statistics Authority is due to publish the October inflation report on Nov. 5. The BSP said it would remain vigilant and guided by incoming data, and would keep assessing the impact of developments in the Middle East on inflation and growth. It sees inflation averaging 6.1% by year-end.