MANILA (Nov 5): Philippine annual inflation accelerated to its highest level since 2023 in October, driven by higher transport and utility costs, strengthening the case for more policy tightening after the central bank's larger-than-expected rate hike last month.

Inflation quickened to 7.8% in October, the highest since February 2023, from 7.2% in September, the statistics agency said on Thursday.

The reading, which exceeded the 7.6% forecast in a Reuters poll, brought the average in the 10-month period to 5.6%, above the central bank's 3.0% target.

Higher fuel prices and fares pushed the transport index up to 20.1% in October from 14.6% in September, government data showed. Utility costs rose 9.3%, accelerating from 8.4% the prior month.

Core inflation, which strips out volatile food and energy prices, climbed to a more-than-three-year high of 5.4% from the revised 4.8%, pointing to broader price pressures that could add to the central bank's concerns.

The central bank, which next meets on Dec 17, raised its key policy rate by 50 basis points to 5.5% in October, the fourth consecutive increase, and signalled it was prepared to tighten policy further to cool inflation.

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