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Philippines: BSP sees inflation easing in October 2018
MANILA, Philippines — Inflation likely eased in October due to lower prices of food items and power rates, the Bangko Sentral ng Pilipinas (BSP) said yesterday.
According to the BSP’s Department of Economic Research (DER), inflation may settle within the 6.2 to seven percent range in October.
“This corresponds to a month-on-month inflation forecast range of -0.2 to 0.6 percent, which is in line with the BSP’s assessment that inflation is likely to have peaked in the third quarter in the absence of further price shocks,” the DER said in a statement.
The central bank said prices of rice and other food items, as well as the downward adjustment in the power rates of the Manila Electric Co. (Meralco), likely offset the increase in domestic petroleum prices and water rates of Manila Water and Maynilad.
“Moving forward, the BSP will continue to closely monitor evolving trends in prices and inflation expectations, and will undertake necessary measures towards its commitment to price stability,” the central bank said.
Inflation last September accelerated further to a near 10-year high of 6.7 percent from the 6.4 percent recorded in the previous month. The BSP earlier said this may already be the peak for inflation this year.
Based on its latest assessment, the central bank sees inflation averaging 5.2 percent in 2018. This is expected to slow down to 4.3 percent in 2019 and 3.2 percent in 2020.
Due to elevated inflation, the Development Budget Coordination Committee also adjusted the government’s inflation target to a range of 4.8 percent to 5.2 percent for 2018, and three to four percent for 2019.
The government has pursued monetary and non-monetary measures to help ease inflation and address the supply issues that has increased the prices of agricultural products.
The Monetary Board of the BSP last September delivered a back-to-back 50-basis point rate hike to anchor inflationary expectations, bringing to 150 basis points the cumulative increase in interest rates so far this year.
On the administrative side, the President issued Administrative Order 13, and Memorandum Orders 26 to 28, which removed administrative restrictions on the importation and release of agricultural products to the market.
Source: https://www.philstar.com/business/2018/11/01/1864808/bsp-sees-inflation-easing-october-2018#p5B4rG4FVYyjMd7F.99