Inflation slows in Oct – Barclays

MANILA, Philippines – UK-based investment bank Barclays has forecast inflation in the Philippines to have slowed down anew in October following the decreases in the cost of some food items and in the price of oil.

“Inflation is expected to remain low amid falling commodity prices,” Barclays said in its latest Emerging Markets Weekly report.

The bank said it sees the inflation rate at 4.3 percent in October, a further deceleration from the 4.4 percent recorded in September.

The projection is within the Bangko Sentral ng Pilipinas’ 3.7-to 4.6-percent forecast range for October. The central bank last week said the rate should reflect the decline in pump prices and lower increases seen in rice, meat and vegetables.

Official October inflation data will be released by the government on Wednesday, Nov. 5.

Inflation eased to 4.4 percent in September from 4.9 percent in August and in July due to lower increases in food prices and in housing and utility rates. This brought the nine-month average to 4.4 percent, above the midpoint of the BSP’s three to five percent target.

The BSP last week said its previous adjustments to monetary policy should keep inflation within the target band for this year until 2016. The central bank has a two to four percent range for 2015 and 2016.

Monetary authorities earlier this month kept key policy rates steady following two consecutive meetings of hiking the overnight borrowing and overnight lending rates by a total of 50 basis points each.

Earlier, the BSP has also raised the reserve requirement ratios and SDA rate to rein in excess liquidity in the system.

The central bank will revisit policy settings next on Dec. 11, its last rate-setting meeting for the year.