Transport costs jumped 20 percent in October, propelling the country's year-to-date inflation to 5.6 percent and easily surpassing the state's 2 to 4 percent target band. In addition to imported fuel spikes, the economy faces food supply threats from an impending El Niño dry spell and currency depreciation to 64 pesos per U.S. dollar. Compounding these challenges, domestic economic growth slipped to 2.3 percent in the second quarter, marking the slowest expansion since late 2009 outside the pandemic.
Key points
Higher fuel expenses are spilling over into power generation and food transit, driving pr…: Higher fuel expenses are spilling over into power generation and food transit, driving price gains well beyond official target bands.
President Ferdinand Marcos stated that robust foreign exchange reserves provide the gover…: President Ferdinand Marcos stated that robust foreign exchange reserves provide the government with adequate resources to defend the depreciated peso.
Emerging weather disruptions linked to an El Niño dry spell pose additional inflation ris…: Emerging weather disruptions linked to an El Niño dry spell pose additional inflation risks by threatening the nation's food supplies.
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The Philippine's latest inflation number is the highest since February 2023.
MANILA: Soaring petrol prices driven by the Middle East conflict pushed inflation in the Philippines to a 44-month high of 7.8 per cent in October, the government said Thursday (Nov 5), as the country continues to struggle with a devalued peso.
The latest inflation number was the highest since the 8.6 per cent recorded in February 2023, chief Philippine statistician Dennis Mapa said, topping analysts' forecast of 7.6 per cent.
"The main reason for the rise in inflation in October compared to September is the 20 per cent rise in transport costs," he told a news conference.
The Middle East conflict has had a harsh impact on the oil import-dependent Philippines, with the peso also diving to record lows, driving up transportation costs for commuters while also affecting other costs from power generation to food transport.
The latest figures bring the inflation rate for the year to 5.6 per cent, well above the government target of 2 to 4 per cent.
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