“Headline inflation rate has decelerated to 4.3% in October 2014. This represents a decline by 0.1 percentage point from the 4.4% rate of the previous month. The three-month moving averages over the past three months shows a more or less declining trend in inflation rate. Meanwhile, core inflation, which excludes certain key energy and food items, has likewise decelerated to 3.2% in October. Its three-month moving average rate, however, has stood at 3.3%, the same level as it had in September but greater than the 3.1% it had in August.”
| Inflation Rate (%) | Aug-2014 | Sep-2014 | Oct-2014 |
| Headline | 4.9 | 4.4 | 4.3 |
| Headline 3-month moving average | 4.7 | 4.7 | 4.5 |
| Core | 3.4 | 3.4 | 3.2 |
| Core 3-month moving average | 3.1 | 3.3 | 3.3 |
| Source of Basic Data: PSA |
“The deceleration in inflation rate in October may be traced to food price decreases. Food items account for nearly 40% of the CPI commodity basket. Food price inflation declined to 7% in October from 7.4% the following month. Another heavy-weight in the index is the price of housing, utilities and fuels, accounting for nearly a quarter of the index. While the average price changes of this commodity group has been rather low, in fact twice lower than the overall price index, it has inched up by 0.2 percentage points to reach 2.4% in October. This partially offset the stabilization in food prices for the same month. All the average prices of major commodity groups, with the exception of food and education, grew slower than the overall rate.”
| Major Commodity Group and Selected Items | Weight | Inflation Rate (%) | ||
| Aug-2014 | Sep-2014 | Oct-2014 | ||
| All Items | 100.00 | 4.9 | 4.4 | 4.3 |
| Food and non-alcoholic beverages | 38.98 | 8.3 | 7.4 | 7.0 |
| Bread and Cereals | 10.7 | 8.8 | 9.0 | |
| Rice | 13.2 | 10.7 | 10.9 | |
| Alcoholic beverages and Tobacco | 1.99 | 3.5 | 3.5 | 3.5 |
| Clothing and footwear | 2.96 | 3.4 | 3.6 | 3.4 |
| Housing, water & electricity, Gas and Other Fuels | 22.46 | 2.7 | 2.2 | 2.4 |
| Actual Rentals for Housing | 1.8 | 1.9 | 2.0 | |
| Electricity, Gas and Other Fuels | 4.6 | 2.4 | 3.2 | |
| Furnishings, household equipment | 3.22 | 2.7 | 2.8 | 2.8 |
| Health | 2.99 | 3.3 | 3.5 | 3.5 |
| Transport | 7.81 | 1.1 | 0.7 | 0.8 |
| Communication | 2.26 | – | 0.1 | 0.1 |
| Recreation and Culture | 1.93 | 1.3 | 1.5 | 1.5 |
| Education | 3.37 | 5.1 | 5.1 | 5.1 |
| Restaurants | 12.03 | 1.7 | 1.8 | 1.7 |
| Source: PSA | ||||
“While the overall food price inflation has eased a bit in October, major food items, prices of rice and bread and cereals, have shown some upward pressure. The rate of increases of average price of bread and cereals stood at 9% in October, up from the 8.8% it registered the month before. Likewise, average price of rice has risen by nearly 11% in October. This is due to the delayed onset of the rice harvest in some regions caused by dry weather conditions.”
“The prices of food items have to be stabilized as food accounts largely in the budget of poor families. This requires preemptive action by Department of Agriculture to facilitate movement from surplus regions to deficit regions. The government will closely monitor and minimize upward price movements.”
“The lower inflation in October will enable BSP to maintain accommodative monetary policy that will boost the country’s capability to sustain economic growth during the last months of 2014.”
