MANILA Philippine annual inflation went up to 6.9 per cent in September, hitting its fastest pace in four years, strengthening expectations that the central bank will hike rates further before the year ends.
The September inflation rate, which was above the 6.7 per cent forecast in a Reuters poll, was driven by high food and utility prices and brought the average rate to 5.1 per cent in the nine months to September, which was well outside the central bank's 2 per cent to 4 per cent target, according to the statistics agency on Wednesday.
The expected inflation rate reinforced expectations that the Bangko Sentral ng Pilipinas BSP, which raised rates by a total of 225 basis points this year, would deliver more rate hikes at its November and December meetings.
The BSP is prepared to take further policy actions to bring inflation towards a target-consistent path over the medium term, consistent with its primary objective to promote price stability, the BSP said in a statement.
In a statement by ING Bank economist Nicholas Mapa, he believes that the central bank will lift its key policy rate by 50 basis points at each of its two remaining meetings this year in order to tame inflation.
Food prices would stay high due to crop damage caused by a recent typhoon, consistent with the expectations of the statistics agency which said on Wednesday that inflation could increase in October.
Core inflation, which strips out volatile food and fuel items, was lowered to 4.5 per cent in September from 4.6 per cent in August.