Inflation for November was up 8% year-on-year
The Philippine Statistics Authority (PSA) [link] revealed that November inflation was 8%, which was even hotter than October’s 7.7% (which was a 14-year high).
The 8% inflation rate was in the middle of the prediction range provided by the government (7.8% to 8.2%) back in October.
The PSA said that the higher inflation was due mostly to the price growth of food and non-alcoholic beverages. The price of vegetables, tubers, plantains, and cooking bananas grew by an incredible 25.8%.
The PSA puts the blame for this month’s result on the “spillover effect” from Severe Tropical Storm Paeng, which struck in October and caused P2.86 billion worth of damage to the agricultural sector, including damage to critical components of our country’s agricultural infrastructure (crop protection centers, warehouses, production facilities; and irrigation systems).
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This result takes the rate increase question out of the BSP’s hands.
Just a few days ago, BSP Governor Felipe Medalla had been publicly talking about how things might be good enough to raise rates by only 25 basis points.
Well, things aren’t good, so I think it’s safe to assume that the 25 bp raise is completely off the table unless something incredible happens globally over the next week.
Otherwise, expect at least a 50 bp raise when the BSP meets next Thursday after the US Federal Reserve decides on its interest rate increase.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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