BSP: “The BSP will continue to monitor closely emerging price developments”
BSP — The Bangko Sentral ng Pilipinas said that inflation could surpass 13-year highs this month given the higher commodity prices during the month.
On Monday, the central bank projects inflation to settle within the 7.1% to 7.9% range this month, higher than the 6.9 percent logged in September. This would also mean that inflation would breach the 2% to 4% target for the 7th straight month.
Inflation will surpass the 7.2% recorded in February 2009 should it settle at the upper band of the range.
The central bank said that inflation pressures for the month are expected to emanate from transport fare hikes, higher agricultural commodity prices because of recent typhoons, elevated domestic petroleum prices, and the depreciation of the local currency.
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Earlier, the Philippine Statistics Authority (PSA) and the Department of Finance (DOF) said that they expected inflation to remain high in the remainder of the year because of the weak peso and the damage caused by Typhoon “Karding”.
However, the central bank noted that the higher prices could be offset in part by the lower electricity rates implemented by the Manila Electric Company (MERALCO), lower prices of liquefied petroleum gas, and lower prices of fish.
The central bank also said that inflation is “projected to gradually decelerate in the succeeding months” as the cost-push shocks to inflation due to transport fare adjustments and weather disturbances dissipate.
“Looking ahead, the BSP will continue to monitor closely emerging price developments to enable timely intervention that could help prevent the further broadening of price pressures in accordance with the BSP’s price stability mandate,” it said.
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