MANILA, Philippines — Higher power rates and costlier farm products due to weather disturbances likely added more fuel to inflation in November, putting more strain on Filipinos’ budgets.
In a statement on Wednesday, the Bangko Sentral ng Pilipinas said it projects inflation to settle between 7.4-8.2% this month. If the upper-limit of the forecast range is realized, the November figure would beat the 7.7% reading in October, which was already the highest in 14 years.
That the BSP still believes that price growth could accelerate at a faster clip in November means inflation unlikely hit its peak in October, contrary to the central bank’s earlier forecast.
Nevertheless, the BSP said “inflation is projected to gradually decelerate in the succeeding months as the cost-push shocks to inflation due to weather disturbances and transport fare adjustments dissipate.”
BSP Governor Felipe Medalla said the central bank is not yet done with its tightening to fight inflation. But he added that any rate hikes moving forward would be softer than before amid signals of less aggressive actions from the US Federal Reserve.
The BSP’s benchmark rate currently stands at 4.5%, the highest since December 2008.
This month, the central bank said upward price pressures likely came from higher electricity rates and more expensive agricultural commodities due to the onslaught of severe tropical storm “Paeng”, which destroyed over P3 billion of farm goods. Another driver of faster inflation this month was higher prices of LPG.
Meanwhile, the reduction in petroleum and pork prices as well as the peso appreciation could contribute to easing price pressures for the month, the BSP explained.
“The timely implementation of non-monetary measures will also help temper price pressures in the months ahead,” the central bank said.