Philippine inflation hits 7.8% as petrol prices rise

Philippine inflation rose to a 44-month high of 7.8 percent in October as petrol prices pushed up transport costs, the government said Thursday.

Chief Philippine statistician Dennis Mapa said the figure was the highest since inflation reached 8.6 percent in February 2023. It was also above analysts' forecast of 7.6 percent.

Mapa said the main reason inflation rose in October from September was a 20 percent increase in transport costs. He also cited risks from the El Nino dry spell now starting to affect food supply and from rising energy commodity prices.

The latest data brought inflation for the year to 5.6 percent, above the government's 2-4 percent target.

The Philippines depends on oil imports, and the Middle East conflict has pushed up fuel costs. The peso has also fallen to record lows, adding pressure on transport, power generation and food transport costs.

The inflation data came two weeks after the central bank raised its key lending rate by 50 basis points to 5.50 percent. The bank said it needed a strong monetary policy response to broadening price pressures and further upside risks to inflation.

President Ferdinand Marcos told Filipinos last week not to panic after the peso fell to 64 to the dollar. He blamed the exchange-rate pressure on rising oil prices and said the Philippines had healthy foreign exchange reserves and tools to defend the peso.

The Philippine economy grew 2.3 percent in the three months to June, the lowest rate since the fourth quarter of 2009 excluding the pandemic years. Third-quarter gross domestic product data is scheduled to be released on Monday.