BSP: Nov. inflation likely on target

INFLATION this month is likely to be within target, as a stronger peso and oil price reductions tempered the rise in consumer prices, according to the Philippine central bank.

The consumer price index would probably increase by 3.3% to 4.1% this month, based on estimates by the Bangko Sentral ng Pilipinas (BSP), Governor Benjamin E. Diokno told reporters in a Viber message on Monday.

The estimate is much slower than the 4.6% rise in consumer prices last month and could be within the BSP’s 2-4% target. The central bank had forecast November inflation at 3.7%, faster than 3.3% a year earlier.

“Higher electricity and liquefied petroleum gas prices along with the uptick in the prices of meat, fish, fruits and vegetables are the primary sources of inflationary pressures during the month,” Mr. Diokno said.

“Moving forward, the BSP will continue to monitor emerging price developments to help achieve its primary mandate of price stability that is conducive to balanced and sustainable growth of the economy,” he added.

The Philippine Statistics Authority will report November inflation data on Dec. 7.

Manila Electric Co. said the power rates for typical households increased by P0.3256 per kilowatt-hour (kWh) from a month earlier to P9.463/kWh in November due to higher generation charges.

Mr. Diokno said oil price rollbacks and a stronger peso against the dollar during the month might have slowed price increases.

The peso closed at P50.39 a dollar on Monday, 2.5 centavos stronger than its P50.415 close on Oct. 29, according to data posted on the Bankers Association of the Philippines website.

This was the second straight month-on-month appreciation of the local currency, although it is still weaker than its P48.023 a dollar close on Dec. 29 last year.

The central bank kept the key policy rates steady on Nov. 18, saying it would focus on supporting economic recovery that had gained traction.

At the same Monetary Board meeting, it revised its average inflation forecast for the year to 4.3% from 4.4%.

Inflation for the 10 months to October averaged at 4.5%. It has exceeded the central bank’s target this year except in July, amid low meat supply and a surge in global oil prices.

The Monetary Board will decide on key interest rates for the last time this year on Dec. 16. — Luz Wendy T. Noble