MANILA, Philippines — Driven by higher food prices, inflation accelerated for the second straight month in November, the Philippine Statistics Authority said.
In a press briefing yesterday, PSA chief Dennis Mapa said headline inflation – the rate of increase in average prices of goods and services typically purchased by Filipino consumers – quickened to 2.5 percent in November from 2.3 percent in October.
Last month’s inflation figure, however, is lower than the 4.1 percent print in the same month last year, and was also within the Bangko Sentral ng Pilipinas’ forecast range of 2.2 to three percent.
Mapa attributed the uptrend in overall inflation to the heavily weighted food and non-alcoholic beverages, which posted a faster uptick of 3.4 percent in November from 2.9 percent in October.
Inflation for food alone went up to 3.5 percent in November from the previous month’s three percent due mainly to the increase in vegetable prices.
Rice inflation, on the other hand, slowed to 5.1 percent in November from the previous month’s 9.6 percent.
“Our expectation for December is inflation for rice will go down, which is good news for households,” Mapa said, noting this is also being reflected in retail prices.
For the January to November period, inflation averaged 3.2 percent, still within the government’s target range of two to four percent.
“Despite the strong typhoons our country faced in recent months, consumer prices have remained relatively stable. This demonstrates the resilience of our economy and the effectiveness of our policies,” National Economic and Development Authority Secretary Arsenio Balisacan said.
He said the government is closely tracking prices, particularly of food products, given the typhoons that hit the country in October and November, which affected food supply and logistics.
Earlier this week, the Development Budget Coordination Committee (DBCC), which approves the government’s macroeconomic assumptions, projected that full-year 2024 inflation would average between 3.1 and 3.3 percent, below last year’s average of six percent.
The DBCC maintained the inflation assumption of two to four percent from 2025 to 2028.
“We are committed to maintaining price stability by ensuring inflation remains low and manageable. This will be supported by prudent monetary policies and strategic trade measures in the near term, as well as improved access to quality job opportunities and productivity-enhancing reforms in the medium term,” Balisacan said.
For this month, he said the government remains optimistic that inflation will remain within the government’s target range.
“Through the timely and strategic use of our various policy levers, a whole-of-government and whole-of-society approach is vital to sustain our momentum in effectively managing inflation. Achieving this objective will be key to making economic growth more inclusive and accelerating our poverty reduction efforts,” he said.
Meanwhile, the Bangko Sentral ng Pilipinas (BSP) said inflation would likely trend closer to the lower end of its two to four percent target range in the near term even after it picked up last month.
In a statement, the BSP said November inflation fell within its month-ahead forecast of 2.2 to three percent.
“The latest inflation outturn is consistent with the BSP’s assessment that inflation will continue to trend closer to the low end of the target range in the near term. This reflects easing supply pressures for key food items, particularly rice,” the central bank said.
However, the BSP flagged emerging upside risks to the inflation outlook for 2025 and 2026, citing potential adjustments in electricity rates and higher minimum wages outside Metro Manila.
Meanwhile, downside risks include the continued impact of lower import tariffs on rice.
“The Monetary Board will consider the latest inflation outturn in its upcoming monetary policy meeting on Dec. 19,” the BSP said.
“The BSP will continue to maintain a measured approach in its easing cycle to ensure price stability conducive to sustainable economic growth and employment,” it added.
The BSP attributed the rise in inflation to costlier prices of key food items, higher electricity rates as well as elevated transport costs amid the peso’s depreciation against the dollar.
China Banking Corp., in a report, said inflation would remain manageable and within target moving forward, giving the BSP room to continue cutting interest rates.
“Hence, we are seeing possibly another 25-basis-point cut from the BSP at its upcoming policy meeting on Dec. 19,” it said.
BSP Governor Eli Remolona Jr. earlier said inflationary pressures might prompt the Monetary Board to maintain interest rates at its Dec. 19 meeting. However, he also noted that the board could weigh the option of another rate cut to bolster slow economic growth.
In a move to shift to a less restrictive monetary policy, the central bank lowered rates by a total of 50 basis points since August. This brought the key rate to six percent from 6.5 percent previously.
Prior to the cuts, the BSP kept borrowing costs steady for six straight meetings starting November 2023. From May 2022 to October 2023, it hiked rates by 450 basis points to tame inflation.
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