BSP expects inflation to climb anew in December

MANILA, Philippines — Inflation likely accelerated to a range of 1.8 to 2.6 percent in December from 1.3 percent in November amid higher electricity rates and oil prices as well as the impact of weather-related disturbances on selected food items, according to the Bangko Sentral ng Pilipinas (BSP).

The central bank’s Department of Economic Research (DER) said the upside price pressures this month were tempered by the continued easing of domestic rice prices as a result of the implementation of Republic Act 11203 or the Rice Tariffication Law.

“Looking ahead, the BSP will remain watchful of evolving price trends and ensure that the monetary policy stance remains appropriate to maintain price stability that is conducive to a balanced and sustainable economic growth,” the central bank said.

Inflation averaged 2.5 percent from January to November, well within the BSP’s two to four percent target.

Based on its latest assessment, the BSP sees inflation averaging 2.4 percent this year before picking up to 2.9 percent in 2020 and 2021.

Upside risks to inflation over the near term emanate mainly from potential volatility in international oil prices amid geopolitical tensions in the Middle East as well as from the potential impact of the African swine fever outbreak and recent weather disturbances on domestic food prices.

On the other hand, uncertainty over trade policies in major economies would continue to weigh down on global economic activity and demand and could thus mitigate upward pressures on commodity prices, the central bank said.