(Bloomberg) -- Philippine inflation quickened within market expectations in October, giving the central bank room to sustain its easing cycle.
Consumer prices rose 2.3% year-on-year in October, matching median economists forecast in a Bloomberg survey and falling within the central bank’s estimate of 2% to 2.8% for the month. Food inflation accelerated as rice price gains snapped a downtrend due to base effects.
While inflation ticked up after decelerating in September, average inflation for the past ten months was at 3.3%, still within the central bank’s 2%-to-4% goal. Core inflation, which strips out volatile food and energy prices, was steady at 2.4%.
The latest inflation print supports further rate cuts from the Bangko Sentral ng Pilipinas, with another quarter-point reduction on the cards for next month. The BSP, in a statement after the inflation data release, said it will keep its “measured approach” in its easing cycle.
The central bank also said it sees inflation trending closer to the lower end of its target in the coming quarters, while flagging upside risks in the next two years.
The Philippines is on track to keep inflation within target, National Economic and Development Authority Secretary Arsenio Balisacan said in a separate statement. Still, he said recent weather disturbances posed “significant challenges” to food supply.
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The Philippine central bank last month reduced its benchmark interest rate by 25 basis points for the second time this year to 6% as slowing inflation gave it room for further easing. Governor Eli Remolona has said the Bangko Sentral ng Pilipinas is unlikely to resort to half-point cuts unless the nation’s economic growth “turns out to be worse than we thought.”
(Adds details from central bank, economic planning agency.)
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