ASEAN KEY DESTINATIONS
Philippines inflation to decline
The BSP forecast November price increases to average between 2 percent and 2.9 percent. Last month, inflation averaged 2.8 percent. "A mix of increases in utilities and certain food items could have been offset by peso strength and lower rice prices due to increased palay production," BSP Gov. Amando Tetangco Jr. said in a text message to reporters.
He said the average inflation for 2010 will fall well within the target of 3.5 percent to 5.5 percent.
"Inflation over the policy horizon is expected to be manageable and closer to the lower end of the target range. We will continue to monitor developments to ensure that our policy stance remains appropriate," the BSP chief said.
For 2011, the full-year average is expected to be closer to the low-end of the target range of 3 percent to 5 percent.
According to monetary authorities, upside risks include sudden stops in capital inflows as a result of the resurgence of risk aversion and changes in monetary policy of the major economies that could affect global growth dynamics.
On November 18, the BSP decided to keep its overnight borrowing or reverse repurchase (RRP) rate at four percent and the overnight lending or repurchase rate (RP) at six percent. The interest in term RRPs and RPs and special deposit accounts were also left unchanged.
The central bank has been keeping the rates at their lowest levels for one year and four months now.
The Monetary Board will hold its last meeting on policy rates on December 30.
Consumer prices in October rose at their slowest pace in 11 months due to a drop in the cost of food and fuel products. Inflation stood at 1.6 percent in October last year.
Excluding selected food and energy items, core inflation last month decelerated to 3.3 percent from September's 3.8 percent.
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