INFLATION was seen finally creeping upward in November after having declined for many months prior, Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said on Thursday.
In a statement, Tetangco said falling inflation should snap from an eight-month downtrend and begin to expand in November averaging 0.4 percent up to 1.2 percent.
“The BSP forecast suggests that inflation could have bottomed out in October to accelerate to a 0.4-percent to 1.2-percent range in November. Lower domestic oil prices of gasoline, diesel and kerosene, as well as decline in rice prices may continue to temper inflation impulses for the month,” he said.
“However, the reported higher power rates, prices of selected vegetables in Metro Manila and LPG [liquefied petroleum gas] may provide offsetting upside pressure,” he quickly added.
But no matter the expected uptick, the central bank is certain to miss its target inflation this year earlier seen ranging from 2 percent up to 4 percent.
The 10-month inflation rate already average 1.4 percent.
Should the November inflation hit the low end of the forecast, it will likely average 1.3 percent over 11 months. Should the November inflation hit the upper end of the forecast, however, it will likely average 1.4 percent. “Going forward, the BSP will continue to monitor price trends and stands ready to implement measures, in line with its commitment to helping deliver price and financial stability,” Tetangco said.
The slight uptick in inflation was also seen to have no impact on the current monetar- policy settings the rest of the year.
In latest views on the economy of the Philippines, ING Bank economist Joey Cuyegkeng in Manila said the BSP was likely to keep the policy settings steady over the immediate term.
“Inflation remains very benign in the near term. But upside inflation risk due to El Niño’s impact on agriculture production had kept the BSP from utilizing monetary-policy leeway to support growth,” Cuyegkeng said.
“Inflation remains benign in the near term which would allow the BSP to proceed with its implementation of the IRC by the second quarter of 2016,” the economist said. Earlier, record-low inflation averaging 0.4 percent in October may have already bottomed out in November, with projected inflation this month seen rising to 0.8 percent due to a modest rise in food prices, the government’s chief economist said on Wednesday. In an economic bulletin, Finance Undersecretary Gil S. Beltran said projected inflation of 0.8 percent in November remain within the 2-percent to 4-percent range that the Cabinet level Development Budget Coordinating Council has set as goal for the year.
“Inflation rate for November may reach 0.8 percent, double the price increase last month, suggesting that inflation may have already bottomed out after hitting record lows of 0.4 percent in the previous couple of months,” Beltran in the economic bulletin said.
The other measures of inflation, however, continue to be at their lowest levels, which is a sign of a continuing rise in competitiveness of Philippine industries.