MANILA, Philippines - London-based Barclays Capital Ltd. said inflation last month likely went up to five percent due to supply disruptions caused by typhoons Pedring and Quiel that translated to higher food prices.
Barclays Capital said consumer prices likely averaged five percent last October (based on 2006 prices) from 4.8 percent in September due to higher food prices.
Last Friday, BSP Governor Amando M. Tetangco Jr. said higher food prices brought about by the supply disruption caused by typhoon Pedring as well as the imposition of the 12-percent value added tax on toll fees likely pushed inflation this month above the higher end of the central bank’s target of three percent to five percent.
Tetangco said consumer prices for October would range between 4.5 percent and 5.4 percent based on 2000 prices this year compared to September’s 4.6 percent due to the damages caused by typhoon Pedring resulting to higher prices of vegetables and fish as well as the imposition of the VAT on toll fees.
The National Disaster Risk Reduction and Management Council (NDRRMC) said that damages to infrastructure and agriculture due to typhoons Pedring and Quiel has reached about P15 billion.
On the other hand, the Bureau of Internal Revenue (BIR) started imposing the 12-percent VAT on toll fees last Oct. 1 and expects to collect between P2.3 billion and P3 billion per year.
Tetangco, however, was quick to clarify that the spike in consumer prices would only be temporary as average inflation would still fall within the full-year target of three percent to five percent.
“These are, however, expected to only result in a one-off escalation in inflation during the policy horizon is expected to remain manageable, moderating towards year-end with the average for full year 2011 well within the target of three to five percent. The inflation for 2012 is also expected to be within target,” he explained.
Latest data from the National Statistics Office (NSO) showed that inflation kicked up to 4.6 percent in September from 4.3 percent in August due to higher water and power rates as well as rising fuel prices. This brought the average inflation in the first nine months of the year to 4.3 percent from 4.1 percent in the same period last year.
Last Oct. 20, the BSP retained the central bank’ inflation forecast of 4.46 percent for this year but lowered the forecasts for 2012 to 3.05 percent from 3.4 percent and for 2013 to three percent from 3.23 percent due to the expected slowdown in global economic growth and the lower forecasts for petroleum prices.