Wednesday October 7, 12:10 AM
Philippine inflation up 0.7 pct as fears grow over storm effects
Philippine inflation rose to 0.7 percent in September, the government said Tuesday, as analysts forecast further price pressure to come after two deadly storms devastated large areas of agricultural land.
The rise in prices was mostly due to an increase in the cost of food, beverages and tobacco, the National Statistics Office said.
But it added that the figure did not take into account the impact of last month's tropical storm Ketsana, which killed almost 300 people when it slammed into Manila.
A week later Typhoon Parma drowned large areas of farmland in the country's northern rice-growing regions and left at least 16 people dead.
The government placed the entire country under a state of calamity, releasing emergency funds while clamping down on predatory pricing.
Average inflation in the Philippines in the nine months to September was 3.4 percent, well within the government's full year forecast of 2.5-4.5 percent.
Inflation in August was 0.1 percent, the lowest in 20 years.
Excluding volatile food and energy items, core inflation slowed to 2.8 percent in September from 2.9 percent in August, the office said.
But while the 0.7 percent rise in September was not worrisome, analyst Astro del Castillo of First Grade Holdings Inc. said the full effects of the twin calamities would begin to be felt this month.
"Definitely there will be upward pressure for the month of October," he told AFP.
"They cannot keep the prices low for ever. There will be pressures on transportation costs; you have to pay overtime, you have to keep bringing in supplies." And he added that with winter arriving there will be external pressure on oil prices.
However, central bank governor Amando Tetangco acknowledged that there would be inflationary pressure, but dismissed it as minimal.
He said he still expected inflation to average around 3.0 percent this year and 3.4 percent next year.
"As expected, September inflation continued to be moderate, well within (the bank's) forecast of between 0 and 0.9 percent," Tetangco said in a statement.
The government, he said, "has accumulated rice and corn stocks much more than normal requirement."
The government has said inflation slowed in the Philippines this year as the economy suffered during the global financial crisis, forcing many to cut spending.
Economic growth slowed to 4.6 percent last year and to 1.0 percent in the first half of the year. The government has also cut its 2009 growth outlook in June to 0.8-1.8 percent from 3.1-4.1 percent.
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