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Friday, March 29, 2024

Inflation eased to 3.3% in November–PSA

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Inflation rate eased to 3.3 percent in October from a three-year high of 3.5 percent in October, on lower increases in the prices of food and non-alcoholic beverages, the Philippine Statistics Authority said Tuesday.

The November figure brought the average inflation in the first 11 months to 3.2 percent, within the target range of 2 percent to 4 percent this year.

“Inflation during the last eleven months suggests that the full-year average might settle slightly above midpoint, but will still be well within our target of 2 to 4 percent. This already considers expected price spikes owing to holiday season spending this December,” Economic Planning Secretary Ernesto Pernia said Tuesday.

Inflation for food and non-alcoholic beverages eased to 3.2 percent in November from October’s 3.6 percent. This was the lowest rate recorded since October 2016, as prices of vegetables, sugar, jam, honey, chocolate and confectionery, fruits, oils and fats and rice declined.

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“We are starting to see year-on-year price declines for ampalaya, cabbage, carrots, tomato, white potato, and imported garlic in the National Capital Region. This signifies that supply is starting to stabilize again,” Pernia said.

Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr. said the  easing of inflation in November was expected, following the October peak.

“We are still on track with 3.2-percent inflation for 2017, just about the mid-point of the target range,” Espenilla said.

Meanwhile, non-food inflation slightly increased to 3.3 percent in November from the previous month’s 3.2 percent. 

“Over the near term, we still expect risks coming from both domestic and external fronts,” Pernia said. 

He said that on the external front, higher international crude oil prices was anticipated following oil production cuts from the Organization of Petroleum Exporting Countries until end of 2018. 

On the domestic front, higher electricity rates and increasing coal and domestic fuel prices would also continue to exert pressures on headline inflation in the near term. 

“Overall, however, the inflation outlook for full year 2017 remains supportive of the current economic growth momentum of the country,” Pernia said. 

The favorable inflation environment coupled with the robust economic growth prompted the Monetary Board of the Bangko Sentral to leave the benchmark interest rates unchanged in the last policy meeting on Nov. 9.

It kept interest rates steady at 3.5 percent for overnight lending, 3 percent for overnight borrowing and 2.5 percent for deposit facilities. The reserve requirement ratios were also maintained.

The last time the board tweaked the policy stance was in September 2014.

The board also kept the average inflation forecast at 3.2 percent both for 2017 and 2019, but the forecast for 2018 was raised to 3.4 percent from 3.2 percent.

Bangko Sentral Deputy Governor Diwa Guinigundo said the board took into account the possible higher crude oil prices next year as member states of Opec were planning to cut oil production, which was backed by non-Opec nations.

Guinigundo said the decline in commercial oil stock was going to affect the supply of petroleum products in the world market.

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