Finance dep’t sees inflation as manageable

THE Department of Finance said inflation will remain at manageable levels over the short term, after food prices decelerated in November.

“Core inflation of 3.3% suggests that in the foreseeable short-term, inflation will be manageable,” Finance Undersecretary Gil S. Beltran said in an economic bulletin yesterday.

The rise in prices of widely used consumer goods and services eased to 3.3% in November from a peak of 3.5% in October, but was still higher than the year-earlier 2.5%.

Core inflation strips out volatile items like food to arrive at a better picture of the long- term inflation trend.

Food inflation slowed to 3.3% in November from 3.8% in October and 3.5% a year earlier.

Consumer price index inflation averaged 3.2% in the 11 months to November, in line with the Bangko Sentral ng Pilipinas (BSP) forecast, and within its two to 4% target band.

Mr. Beltran said the stable prices of food might offset the faster increases in the prices of fuel and power rates for the month.

“Adequate supply of goods from higher production will further dampen inflation rises in the future. This will likewise temper the rise in interest rates despite the ongoing Fed tightening,” Mr. Beltran said.

The Federal Open Market Committee raised its benchmark rates by 25 basis points late Wednesday, which was widely expected by the market, and represented the third policy tightening this year.

BSP Governor Nestor A. Espenilla, Jr. has said that the Fed rate hike was factored into the central bank’s economic outlook. —