The country’s headline inflation could have eased to 2.4 percent or accelerated to 3.2 percent this month from 2.5 percent in October on higher oil and food prices, lower energy rates and a stronger peso, the Bangko Sentral ng Pilipinas (BSP) said on Friday.
“Higher domestic oil prices, as well as the impact of weather disturbances on the prices of rice and select agricultural commodities, contributed to upward prices pressures during the month,” BSP Governor Benjamin Diokno told reporters in a Viber message, ahead of the Philippine Statistics Authority’s release of official November inflation data on December 4.
Local oil companies hiked the price of diesel and kerosene by 50 and 30 centavos per liter, respectively, on Tuesday, which Diokno said “could be partly offset by the downward adjustment of electricity rates in Meralco (Manila Electric Co.) serviced areas and the contributed appreciation of the peso.”
Meralco reduced its per kilowatt-hour (kWh) rate for households consuming 200 kWh monthly by P0.0395 this month.
The local currency currently trades within the P48:$1 level, compared to the closing rate of P50.64:$1 at end-December 2019. On Friday alone, the peso closed at its strongest in over four years at P48.06 to the dollar.
“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.
Last week, the Bangko Sentral raised its inflation forecast for 2020 from 2.3 percent to 2.4 percent, but reduced the estimate from 2.8 percent to 2.7 percent for 2021 and from 3.0 percent to 2.9 percent for 2022.
According to the central bank chief, consumer price growth is projected to remain within the government’s target range of 2 to 4 percent, as the latest baseline forecasts continue to indicate a benign inflation environment.
“Average inflation is seen to settle within the lower half of the target band for 2020 up to 2022, reflecting slower domestic economic activity, lower global crude oil prices and the recent appreciation of the peso,” Diokno said.
“The balance of risks to the inflation outlook also remains tilted toward the downside, owing largely to potential disruptions to domestic and global economic activity amid the ongoing pandemic,” he added.