Inflation Seen Lower In November

November 26, 2012, 5:52pm

Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. yesterday said inflation for the month of November could be lower than October’s 3.1 percent due to relatively stable supply and demand conditions of the past month.
Tetangco forecasts inflation this month could hit a low of 2.7 percent to a high of 3.6 percent which was September’s rate.
“The BSP expects the November inflation to be sustained at 2.7-3.6 percent which is well within the target range of 3-5 percent,” he said. “Supply conditions remained favorable while demand continued to be robust.”
The equally stable exchange rate and fuel prices may have pulled inflation lower than September’s 3.6 percent. “Oil prices were broadly stable while the peso’s relative firmness helped support price stability,” said Tetangco.
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The latest inflation quarterly report from the central bank indicated that inflation outlook remains manageable which is providing room for monetary policy to support economic growth despite the prevalent uncertainties outside of the Philippines.
Baseline forecasts indicate a benign inflation path, with the risks to the inflation outlook considered to be broadly balanced, the BSP report said. “Potential upside risks to inflation include pending power rate adjustments and higher global prices for some grains. Nonetheless, subdued global demand could moderate upward pressures on international commodity prices, thus tempering the overall inflation outlook,” it added.
According to Tetangco, from a monetary perspective, the central bank’s current policy stance “remains consistent with prevailing monetary and price conditions.” “We will continue to be watchful of any emergent risks that could alter the inflation outlook and expectations and calibrate monetary policy as warranted.”
In the BSP report, it said additional policy support amid a manageable inflation outlook could help ward off the risks associated with weaker external demand by encouraging investment and consumption.
As of end-October, the country’s average inflation was at 3.2 percent. The consumer price index declined last month because of the lower prices of key food products such as vegetables and oils. Prices of fruits, fish, rice and sugar, in the meantime, had tempered price increases during the period.