BSP sees 2.9%-3.6% November inflation

The central bank forecasts inflation for the month of November may hit a high of 3.6 percent from the previous month’s 3.5 percent due to petroleum and electricity price increases.

The Bangko Sentral ng Pilipinas’s (BSP) Department of Economic Research yesterday said they expect a range of 2.9 percent to 3.6 percent November inflation.

It said the higher prices of both domestic fuel and power rates in Meralco-serviced areas “could contribute to upward price pressures which could be partly offset by the slightly stronger peso for the month.”

The inflation rate climbed higher in October at a two-year high of 3.5 percent from 3.4 percent in September. It is the highest monthly rate for the year unless November rate as forecasted by the BSP, reach 3.6 percent.

In a November 9 Monetary Board meeting where the BSP as predicted, kept its key overnight rates unchanged, officials however raised the central bank’s 2018 inflation forecast to 3.4 percent from a previous estimate of 3.2 percent.

The BSP did not change its 2017 and 2019 inflation forecasts of 3.2 percent. It continue to expect a manageable inflation environment but decided to adjust next year’s inflation forecast because of the peso depreciation, higher oil prices and what could be an acceleration in liquidity growth.

Based on the BSP’s Private Sector Economists Inflation Forecasts survey for the third quarter, the economists’ mean inflation forecasts for 2017 and 2019 dipped compared to the end-June survey. For next year, the mean forecast remained steady.

Economists surveyed now expect 3.1 percent from 3.3 percent in the last tally. For 2018 it was unchanged at 3.4 percent while for 2019, the inflation forecast was reduced to 3.4 percent from 3.5 percent.

The BSP said most analysts expect full year 2017 inflation to remain “close to the midpoint of the government’s target range of two percent to four percent amid relatively balanced risks to inflation. (LCC)