Union Bank of the Philippines, the eighth-largest lender in terms of assets, said inflation in November likely inched up to 1.3 percent from 0.8 percent a month ago, as the base effect of higher inflation level last year starts to dissipate.
“November 2018 recorded inflation level at 6.0 percent, lower from October 2018’s 6.7 percent. While October 2019 recorded a year-low 0.8 percent, it is expected an uptick may occur due to the lower base effect, year-on-year,” Unionbank said in an economic research bulletin released Monday.
“Moreover, food prices may have risen due to weather-related reasons and the continuing impact of the African Swine Fever (ASF) on pork products. The ASF may have caused prices of alternatives/substitutes to rise due to higher demand,” the bank said.
It said another factor for inflation uptick was higher consumption demand in general as Christmas drew near.
The bank said with the 2019 inflation average well-entrenched between the government’s target of 2.0 to 4.0 percent at 2.6 percent so far, “there is ample traction to the BSP governor’s recent mention of a potential rate cut in the Monetary Board’s December meeting.”
The bank sees the 2019 inflation to settle at 2.4 percent, well within the target range.
The Bangko Sentral ng Pilipinas said inflation in November 2019 likely picked up slightly from 0.8 percent a month ago, due to higher fuel and food items.
The BSP Department of Economic Research projected the November 2019 inflation to settle within the 0.9 percent to 1.7 percent range.
“The increase in electricity rates as well as higher prices of gasoline, LPG [liquefied petroleum gas], and selected food items are seen as the primary sources of upward price pressures for the month,” it said.
“Meanwhile, inflation could be tempered by lower domestic rice prices and the appreciation of the peso,” it said.
Inflation in October further dipped to a 42-month low of 0.8 percent from 0.9 percent a month ago, tempered mainly by base effects and slower increases in the prices of food and oil.