HIGHER food and energy prices, along with a weaker peso, could push inflation up in November, the Bangko Sentral ng Pilipinas (BSP) said on Friday.
The central bank’s estimate of 2.2-3.0 percent for the month leans toward an increase from October’s 2.3 percent, but remains in line with the 2.0- to 4.0-percent target for the year.
The Philippine Statistics Authority is scheduled to release November inflation data on Dec. 5.
“Increased prices of vegetables, fish and meat due to unfavorable weather conditions, higher electricity rates and petroleum prices, and the depreciation of the peso are the primary sources of upward price pressures this month,” the central bank said in a statement.
“These are expected to be offset in part by lower prices of rice,” it added.
The BSP said it would “continue to take a measured approach in ensuring price stability conducive to balanced and sustainable growth of the economy and employment.”
Most analysts expect the rate to go up this month after a series of storms battered the country and caused extensive farm damage.
Inflationary pressures, BSP Governor Eli Remolona Jr. earlier this month said, could prompt a pause when the policymaking Monetary Board meets on Dec. 19.
However, a weaker growth could also push monetary authorities to continue cutting key interest rates, he added.
The Monetary Board began easing in August, cutting key interest rates by 25 basis points (bps) and following this up with another 25-bp reduction in September.
The BSP’s benchmark rate currently stands at 6.0 percent, and most analysts expect another 25-bp cut in December.
Speaking to the reporters on Friday, Socioeconomic Planning Secretary Arsenio Balisacan said that higher November inflation was possible, but the rate would still be within target.
“If it increases, [I think] it would be marginal because we don’t see broad increases, substantial increases in prices. But we are monitoring,” he said.
“We don’t think that the new number will bridge our target of 2 to 4 percent. So it’s probably still within that range,” he added.
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