Inflation stays at 6.7% in October, higher than officials' expectation

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Metro Manila (CNN Philippines, November 6) — Inflation, or the rise in prices of basic goods and services, remained unchanged at 6.7 percent in October, the Philippine Statistics Authority announced Tuesday.

The inflation rate for October from a year ago halted the continuing rise of the index since January. But the rate was the same as that posted in September, contrary to economic managers' earlier estimate that inflation tapered last month and that it is well on its way down.

READ: Diokno: Inflation has peaked, prices to go down

The Bangko Sentral ng Pilipinas (BSP) forecast earlier pegged October inflation between 6.2 and 7 percent.

The Department of Finance also estimated October's inflation to ease at 6.5 percent on November 4, citing the stabilizing of food prices.

"Rice harvest season starts, rice imports by NFA and the private sector have started to come in and the vegetable industry has partly recovered from the prior month's severe weather disturbances. Other administrative streamlining measures signed by President Duterte to boost food supply are underway," DOF Chief Economist Usec. Gil Beltran earlier said.

Analysts polled by CNN Philippines earlier anticipated inflation slowed down in the previous month, falling at an average of 6.6 percent.

The PSA noted slowdowns in the price increases of food and non-alcoholic beverages at 9.4 percent, which is 0.3 percent slower than its movement in September. But the statistics body said rice and fish prices continue to hike despite government efforts to address supply concerns.

In the National Capital Region, inflation slowed down to 6.1 percent in October, compared to the 6.3 percent in the previous month.

Areas outside the NCR, however, followed the national trend and stayed at 6.8 percent. Bicol Region continued to post the highest inflation, but a bit slower at 9.9 percent compared to the former 10.1 registered in September.

Is this good or bad?

BSP Governor Nestor Espenilla said October's inflation data supports the economic managers' claims of rise in prices finally tapering off.

"It's a significant deceleration although the headline figure remains elevated. Second round effects are also muted so far. That augurs well for a return to inflation target by 2019," he said in a statement Tuesday.

Espenilla added the Monetary Board will take account of the data including the incoming gross domestic product numbers in its next policy meeting, to see if there is need for policy rate adjustments.

This story has been updated to include the statements of BSP Governor Nestor Espenilla.