The inflation rate in October rose to 1.6 percent from the previous month’s 0.7 percent as crop damages brought by typhoons Ondoy and Pepeng pushed food prices up and year-on-year water price.

Excluding selected food and energy items, core inflation continued to register a slower rate at 2.7 percent in October from 2.8 percent in September, according to the National Statistics Office (NSO).

“Prices of fruits and vegetables increased by 8.4 percent in October 2009 compared to the preceding month mainly because the typhoons, Ondoy and Pepeng, which struck the country in the last week of September and first week of October, respectively, left major agricultural towns with damaged crops. Typhoon Pepeng particularly, wrought havoc to Benguet province, the primary source of vegetables,” says NEDA Director-General Augusto Santos.

The surge in the consumer price index in October was expected due to recent typhoons, with the buildup of inflationary pressures likely temporary, the Bangko Sentral ng Pilipinas said Thursday.

"Inflation in October at 1.6 percent is within the BSP's forecast range," said BSP Governor Amando Tetangco in a text message, referring to the central bank's 0.8%-1.7 percent estimate for October inflation.

"We expect this to be largely temporary, with the underlying near-term trend remaining manageable," he added.

The increase in fruit and vegetable prices brought the October month-on-month inflation to 0.6 percent, higher than the 0.2 percent inflation recorded in September 2009.

“Data from the Bureau of Agricultural Statistics showed that prices of amargoso, cabbage, baguio beans, and eggplant increased by more than 50 percent from their prices in September 2009,” Santos said.

Also contributing to the rise in consumer prices was the 12.1 percent increase in water prices in October 2009 from the same period last year.

However, this was mitigated by decreases in the prices of non-food items such as transportation and communication services (-7.3%), fuel (-6.6%), and light (-5.1%).

Santos added that the average inflation rate of 3.2 percent for the first 10 months of 2009 is still within the Development Budget Coordination Committee (DBCC) forecast of 2.5 to 4.5 percent.

Meanwhile, core inflation, which measures the change in average consumer prices excluding certain items with volatile price movements such as food products and energy, continued to slow down to 2.7 percent from the 2.8 percent recorded in September 2009 and 7.8 percent in October 2008.