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Inflation Update: Prices remain under control in October
The latest inflation print shows that we are on track to reaching our forecast for the year.
By Metrobank Research
Headline inflation accelerated to 2.3% year-on-year (YoY) in October, up from the 1.9% recorded in September.
Together with escalating geopolitical tensions in the Middle East, the impact of typhoons on commodity prices now becomes the biggest risk to our call. The recent Typhoon Kristine interrupted the supply chain in affected areas and reportedly caused damage to agricultural products of about PHP 5.75 billion.
With the recent inflation print, we maintain our average full year 2024 forecast at 3.2%. However, average full year 2025 forecast has been nudged higher to 3.2% as we expect higher demand-side pressure, given the projected impact of the Bangko Sentral ng Pilipinas (BSP)’s easing cycle to consumption. For 2026, we maintain our 3.0% full-year average forecast, barring any supply side shocks.
Read more:
- Is the Philippines ready for oil-slicked inflation?
- Policy Rate Updates: Philippine central bank takes baby steps in rate cut cycle
With inflation projected to stay within target, we maintain our forecast that the BSP will deliver another 25-basis-point cut in its last meeting in December, bringing down its year-end forecast for the Reverse Repurchase (RRP) rate to 5.75% in 2024.
Download our report below for more details.
Inflation stays subdued at 2.3%
The latest print is slightly lower than our forecast and is within the central bank’s forecast for October. Risks, however, are emerging.
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