Oct inflation to range 4.5-5.3% – BSP
HIGHER domestic oil prices as well as a weaker peso likely accelerated the country’s headline inflation rate to as high as 5.3 percent this month, but low rice and meat prices could drag consumer price growth to as low as 4.5 percent, according to the Bangko Sentral ng Pilipinas (BSP).
“The BSP projects October 2021 inflation to settle within the 4.5- to 5.3-percent range,” BSP Governor Benjamin Diokno said in a statement on Friday.
The estimate compares to September’s 4.8-percent surge and 2.5-percent increase a year ago.
The Philippine Statistics Authority will release official October inflation figures on Nov. 5, 2021.
“Inflation will be driven largely by the upward adjustments in domestic oil prices. Higher Meralco (Manila Electric Co.) electricity rates, increased fish and fruits prices, and the peso depreciation will provide additional upside pressures,” Diokno remarked.
Oil companies raised the price of domestic oil four times this month, the Department of Energy reported. The most recent was on October 26, when they increased gasoline prices by P1.10 to P1.15 per liter, diesel prices by P0.35 to P0.45 per liter, and kerosene prices by P0.55 per liter.
Meralco, on the other hand, increased the cost per kilowatt-hour (kWh) for residences consuming 200 kWh per month by P0.1212 in
October.
Meanwhile, the Philippine peso spent much of October trading at the area of P50 to the US dollar.
“These could be partially offset by the continued decline in rice and meat prices, reflecting continued arrival of pork imports,” Diokno pointed out.
“Moving forward, the BSP will continue to closely monitor emerging price developments to help ensure that its primary mandate of price stability conducive to balanced and sustainable economic growth is achieved,” he added.
The central bank projects average inflation to be higher this year, at 4.1 percent, than the goal range of
2 to 4 percent. Inflation forecasts for 2022 and 2023 have been raised from 3 percent to 3.1 percent.
“While the inflation path is seen to remain above the target range of 2 to 4 percent up to October 2021, it is expected to decelerate to within the inflation target range of before the end of the year as the nonmonetary measures of the government will help moderate the impact of supply bottlenecks,” Diokno stressed in a recent speech.
In the future, he said the Bangko Sentral will continue to support the economy for as long as it is required to achieve the country’s strong and long-term economic recovery. It will also be on the lookout for any new risks to the inflation and growth outlook, and will alter its policy settings as necessary.