BSP: November inflation at 1.6-2.4%

MANILA--The Bangko Sentral ng Pilipinas (BSP) projects November 2016 inflation to settle within 1.6 percent to 2.4 percent.

In a text message to reporters Monday, BSP Governor Amando Tetangco Jr. said downside risks to inflation this month include lower petroleum prices, slight decline in rice prices and downward adjustment in power rates.

“(These factors, however) could be partly offset by higher LPG prices and weaker domestic currency during the month,” he said.

“Looking ahead, the BSP will continue to moni- tor evolving price trends and output conditions to ensure price stability conducive to a balanced and sustainable economic growth,” he added.

Last October, inflation rate was flat at 2.3 percent from the previous month’s level, the second time that inflation rate went up to within the two to four percent target of the government since falling below target in May 2015 to 1.6 percent.

Inflation last August stood at 1.8 percent.

However, the average rate in the first 10 months this year remains below target at 1.6 percent.

Last Nov. 10, the central bank’s policy-making Monetary Board (MB) revised its average inflation projection for 2016 to 2018 due partly to the big jump in the September and October inflation rates.

The latest 2016 projection is 1.8 percent, up from 1.7 percent during the Monetary Board meeting last September.

For 2017 and 2018, the new figures are three percent, from 2.9 percent, and 2.9 percent, from 2.6 percent.

A rebound in the price of petroleum products in the international market is also among the factors in the upward revision of the inflation assumptions for the three-year period.

Oil prices rose to around $50 a barrel last October, but has declined to around $46 per barrel to date, given the tumult in the global financial market and the planned cut in production levels among members of the Organization of the Petroleum Exporting Countries (OPEC).

Another factor in the hike of the inflation projections is the weakness in the Philippine peso, which is now trading at 49-level to a dollar.