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UPDATE 1-Philippines Oct inflation picks up to three-month high

* Oct CPI +2.5% yr/yr vs +2.3% in Sept

* Core CPI +3.0% yr/yr vs +3.2% in Sept (Adds detail, context)

MANILA, Nov 5 (Reuters) - Philippine annual inflation beat market forecasts in October to hit a three-month high, driven by the heavily-weighted food and non-alcoholic beverages index, though it was within the central bank’s projected range.

The Consumer Price Index rose 2.5% last month from a year earlier, faster than the 2.3% rise in September, the Philippine Statistics Authority said on Thursday.

It was above the 2.3% median forecast in a Reuters’ poll but within the Bangko Sentral ng Pilipinas’ (BSP) projected range of 1.9% to 2.7% for the month.

Core inflation, which excludes volatile food and fuel prices, slowed to 3.0% from 3.2% in September.

Inflation averaged 2.5% in January-October, well within the official target range of 2% to 4%.

In an interview with Reuters on Oct. 27, BSP Governor Benjamin Diokno said inflation was “the least of our worries” as he emphasized there was no immediate need for further monetary easing to support the pandemic-hit economy.

On Thursday, Diokno said the balance of risks for inflation continued to be on the downside due largely to the possibility of further global economic disruption caused by the pandemic.

The central bank has been among Asia’s most aggressive in easing policy, cutting its benchmark rate by a total of 175 basis points so far this year, to mitigate the pandemic’s economic fallout.

It also slashed lenders’ reserve requirement ratios, and pumped over a trillion pesos worth of liquidity into the financial system.

The central bank has two more policy meetings this year, with the next one scheduled for Nov. 19, after the release of third-quarter GDP data on Nov 10. (Reporting by Neil Jerome Morales and Enrico Dela Cruz Editing by Ed Davies)

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