Inflation change unlikely in Oct
The Bangko Sentral ng Pilipinas (BSP) said on Friday that the country’s headline inflation likely remained steady at 2.3 percent on higher power, oil and food prices.
ng Pilipinas on October 30 expects inflation to remain steady on higher electricity, oil and food prices. PHOTO BY ENRIQUE AGCAOILI
In a statement, BSP Governor Benjamin Diokno said October’s point inflation estimate was still within the 1.9-to-2.7-percent forecast range of the central bank’s Department of Economic Research.
The projection matched the 2.3-percent consumer price growth in September, but was faster than the 0.8-percent in October 2019.
The Philippine Statistics Authority (PSA) will release official October inflation data on November 5.
“Higher electricity rates in Meralco (Manila Electric Co.)-serviced areas, increases in LPG (liquefied petroleum gas) and kerosene prices, and the impact of weather disturbances on selected food items contributed to upward price pressures for the month,” Diokno said.
Meralco raised its per kilowatt-hour (kWh) rate for households consuming 200 kWh monthly by P0.1212 this month, while oil companies increased LPG prices by P1 — about P11 per 11-kg cylinder — on October 1.
“These could be partly offset by lower prices for gasoline, diesel and rice, as well as downward adjustments in the water rates of Manila Water- and Maynilad-serviced areas,” Diokno said.
Local oil companies decreased the price of diesel by 25 centavos per liter on Tuesday.
Latest PSA data show that rice prices declined in the first week of October, with the average retail price of regular milled rice dropping to P37.04 per kilogram from P37.25 per kilogram the week before.
Earlier, Manila Water Co. Inc. and Maynilad Water Services Inc. announced lower water rates for the fourth quarter.
“Looking ahead, the BSP will remain watchful of economic and financial developments to ensure that its primary mandate of price stability conducive to balanced and sustainable economic growth is achieved,” Diokno said.
The forecast comes a day after the central bank chief said at a briefing that the latest baseline projections indicated that consumer price growth was likely to remain within the 2-to-4-percent target range of the Bangko Sentral over the policy horizon.
Earlier, the BSP trimmed its inflation projection from 2.6 percent to 2.3 percent for 2020, from 3 percent to 2.8 percent for 2021, and from 3.1 percent to 3.0 percent in 2022.
“The overall balance of risks to the BSP’s inflation outlook also remains tilted to the downside for 2020 through 2022, as uncertainty surrounding the pandemic continues to dampen demand and prospects for a strong and immediate recovery,” Diokno said.
These risks to inflation and output underscore the need for continued policy support, he added.