ASEAN KEY DESTINATIONS
Inflation in the Philippines quickened to its fastest pace in nine months in November bolstered by higher prices of food, non-alcoholic drinks, housing and utilities, the National Statistics Office (NSO) reported Thursday.
In a report, the NSO said inflation accelerated to 3.3 percent last month from 2.8 percent in November last year and was the fastest since February when prices rose by 3.4 percent.
The latest inflation data brought the 11-month average to 2.8 percent, or below Bangko Sentral ng Pilipinas's 3 to 5 percent full-year target.
There were "... higher annual increments in the indices of food and non-alcoholic beverages; housing, water, electricity, gas and other fuels," said NSO.
In a text message to reporters Thursday, Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said the full impact of natural calamities on consumer prices remains to be seen but it would definitely stoke inflationary pressure.
“We could see inflation inch up in the coming months as more of the effects of the calamities become known. Nevertheless, as experience in past natural calamities have taught us, we do not see these effects persisting,” said Tetangco.
Despite the faster movement of prices, 3.3 percent was below analysts’ expectations as government imposed price controls in areas devastated by Typhoon Yolanda, Prakriti Sofat, economist at Barclays Plc. in Singapore, said.
The official number was a tad lower than the 3.4 percent median forecast in a GMA News Online poll of economists, who assumed supply bottlenecks could have driven prices higher in Yolanda-stricken areas.
"Inflation picked up in November, but by less than expected," Sofat wrote in an e-mailed research note Thursday.
"Government efforts help to limit post-typhoon food price rises for now, but we still expect further increases in the coming months," Sofat added.
Bangko Sentral has said that affected regions account for roughly a tenth of the Philippines' consumer price basket.
“Inflation in November was at the lower end of the forecast range of the BSP… Over the policy horizon, inflation is still seen to be within target,” Tetangco said.
Policy settings, therefore, remain appropriate, “but we stand ready to make adjustments as and when needed to address unforeseen developments,” he added.
Monetary authorities would refrain from tweaking policy in the face of benign inflation and well-anchored price expectations until the third quarter of 2014, Sofat said.
"We expect BSP to raise the policy rate 25 basis points… in the third quarter of 2014 as inflation rises towards the top half of the 3-5 percent target band, given the lagged impact of relatively robust growth," she said.
The Monetary Board, which is scheduled to discuss policy on Dec. 12, has kept the benchmark rate at 3.5 percent since October last year, allowing brisk lending activity. – VS, GMA News
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