Philippine inflation hits 1.6 pct due to storms

MANILA (AFP) - – Philippine inflation rose to 1.6 percent in October as killer storms pushed up food prices, the government said Thursday.

Tropical storms Ketsana and Parma caused massive flooding and landslides, damaging crops and making it harder to harvest and transport agricultural goods, the National Statistics Office said.

Inflation stood at 0.1 percent in August and 0.7 percent in September amid the effects of the global financial crisis.

The northern part of the country was pounded by storms from September 26, leaving over a thousand dead and causing massive landslides and the worst flooding in the region in four decades.

"The limited supply of vegetables in the markets as roads from vegetable supplying provinces were not passable due to landslides and road cuts caused their prices to accelerate during the month," the government agency said.

The inflation trend should be upward for some time as the country rebuilds after the storms and in the face of campaign-related spending for the May 2010 presidential election, said Nisha Alicer of DA Market Securities.

"It's not double-digit inflation so it's acceptable," Alicer told AFP, who warned however that consumer spending was expected to rise the first to second quarter of 2010.

"Inflation is going to be at this level or go higher," she said.

However, Dow Jones Newswires quoted central bank governor Amando Tetangco as saying the uptick would be short-lived.

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

Even so, Tetangco said the reading will be a crucial point for consideration during the central bank's review of its key interest rates later in the day.

Average inflation in the Philippines in the 10 months to October was 3.2 percent, well within the government's full year forecast of 2.5-4.5 percent, the statistics office said.

Excluding volatile food and energy items, core inflation slowed to 2.7 percent in October from 2.8 percent in September.