Inflation steadies at 2.3% in November
DBS economist Gundy Cahyadi said the pace of investment growth would play a role in supporting the consumption story in the nearer-term. Investment growth, he added, has now averaged 25 percent over the past year, an unprecedented feat. This, despite the fact it eased to 23.5 percent in the third quarter.
MANILA, Philippines - Inflation likely remained steady for the second straight month in October, falling within the central bank’s own forecast as domestic demand becomes more fuelled by investment than consumption, Singapore-based DBS Ltd. said.
DBS economist Gundy Cahyadi said the pace of investment growth would play a role in supporting the consumption story in the nearer-term.
Investment growth, he added, has now averaged 25 percent over the past year, an unprecedented feat. This, despite the fact it eased to 23.5 percent in the third quarter.
Furthermore, he said the government’s infrastructure overhaul would continue to drive construction sector that expanded by 15.5 percent in the third quarter.
Higher investments do little to push prices up and thus could see inflation remaining steady at 2.3 percent last month, similar from August and September level.
The figure is within the forecast range of 1.6 and 2.4 percent of the Bangko Sentral ng Pilipinas (BSP) for the month. Inflation averaged 1.6 percent in the first 10 months.
The BSP has set an inflation target of between two and four percent from 2016 to 2018.
“We reckon that the domestic story is compelling enough reason for the BSP to eventually tighten its policy stance,” Cahyadi said.
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