Inflation seen easing to 3.7% in November

MANILA, Philippines — Inflation likely eased back to within the two to four percent target of the central bank for the first time this year, averaging 3.7 percent in November, according to Bangko Sentral ng Pilipinas Governor Benjamin Diokno.

Diokno said the BSP sees inflation settling within 3.3 to 4.1 percent in November after averaging 4.5 percent from January to September.

“Higher electricity and LPG prices, along with the uptick in the prices of meat, fish, fruits, and vegetables are the primary sources of inflationary pressures during the month. These could be offset in part by rollbacks in domestic petroleum prices and the appreciation of the peso,” Diokno said.

Inflation has stayed above the BSP’s two to four percent target since the start of the year due to supply side shocks caused by weather-related disturbances and African swine fever (ASF) outbreak, as well as rising global oil prices.

Inflation peaked at a 32-month high 4.9 percent in August before easing for two straight months to 4.8 percent in September and 4.6 percent in October.

“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,” Diokno said.

In its latest assessment, BSP Deputy Governor Francisco Dakila Jr. said the latest inflation forecast was lowered to 4.3 percent from the original target of 4.4 percent due to the favorable inflation outturn in September and October.

Dakila said the Monetary Board already took into account the declining global oil prices, as well as the faster-than-expected 7.1 percent gross domestic product (GDP) growth recorded in the third quarter.

The BSP maintained its inflation forecast at 3.3 percent for 2022 and 3.2 percent in 2023.

Dakila earlier said inflation could ease back to within the BSP’s two to four percent target as early as November.

Despite the elevated inflation, the BSP has maintained an accommodative monetary policy stance for eight straight rate setting meetings to help the Philippines fully recover from the pandemic-induced recession.