(STAR) By Lawrence Agcaoili - Consumer prices rose for the second straight month, kicking up to 1.6 percent in October from 0.7 percent in September due to higher food prices as a result of the damages caused by tropical storm Ondoy and typhoon Pepeng.

Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said consumer prices last month was within the 0.8 percent to 1.7 percent forecast of the central bank.

Tetangco pointed out that the uptick last month was primarily due to supply pressures in agricultural products brought about by the recent natural calamities.

“The uptick in inflation was due mainly to the markedly higher prices of fruits and vegetables owing to crop losses and delivery bottlenecks in the wake of recent weather-related calamities. Rice and meat prices were also higher year-on-year,” Tetangco said.

The average inflation rate for the 10-month period stood at 3.2 percent, well within the government’s full year forecast of 2.5 to 4.5 percent. Excluding volatile food and energy items, core inflation slowed to 2.7 percent in October from 2.8 percent in September.

The BSP chief said inflation last month was way below the 11.2 percent registered in October last year bringing the average inflation to 3.2 percent from January to October compared with 9.4 percent in the same period last year.

He said the uptick in consumer prices was largely temporary and the underlying near term showed that inflation remained manageable.

“The most recent inflation reading and the latest inflation forecasts indicate that the inflation targets for both 2009 and 2010 continue to be attainable,” Tetangco said.

The BSP inflation targets are pegged at 2.5 percent to 4.5 percent this year and 3.5 percent to 5.5 percent next year. The central bank sees inflation averaging 3.03 percent this year and 3.43 percent next year.

The National Statistics Office (NSO) attributed the pick up in the country’s annual headline inflation rate to the higher annual price increment in heavily weighted food, beverage, and tobacco (FBT) index.

“The devastation caused by typhoon Pepeng in the northern part of Luzon limited the volume of vegetable deliveries in the markets thereby pushing up their prices in National Capital Region and in many regions,” the NSO said.

The agency also noted higher prices of fruits and pork in selected regions including NCR.

Data showed that inflation rate for food, beverage and tobacco accelerated to 3.2 percent in October from 2.2 percent in September. Overall inflation for food alone climbed to 3.8 percent from 2.1 percent.

Prices of vegetables accelerated last month due to limited supply in the markets as roads from the provinces were not passable due to landslides and road cuts while higher prices of selected fruits were also posted in many regions including NCR.

On the other hand, the supply gap and bigger demand of pork in many provinces resulted to higher prices in the markets. The same were also noted for chicken and beef in selected regions as well as fish as unfavorable weather conditions resulted to less supply in the wet markets.

Annual inflation for clothing, housing and repairs as well as miscellaneous items however eased to two percent from 2.1 percent while negative annual rates were still seen in the indexes of fuel, light, and water with -3.6 percent, and services with -2.2 percent.

Consumer prices in the country eased steadily since February until it hit a 20-year low of 0.1 percent in August as Filipinos opted to go slow on spending due to the full impact of the global economic meltdown.

The global slowdown slashed the country’s gross domestic product (GDP) growth to one percent in the first half of the year from four percent in the same period last year. The growth was well within the government projection of 0.8 percent to 1.8 percent.

Chief News Editor: Sol Jose Vanzi

All rights reserved