Inflation may have already peaked in Nov

Inflation in the Philippines may have peaked in November, with the Bangko Sentral ng Pilipinas (BSP) expecting the latest monthly figure to be within the range of 7.4 percent to 8.2 percent.

If official numbers—which the Philippine Statistics Authority would announce by Dec. 6—hit the midpoint of that range at 7.8 percent, then inflation would have risen further from 7.7 percent in October.

In a statement, the BSP said inflation in November was buoyed by higher prices of electricity and liquefied petroleum gas, and agricultural commodities due to severe tropical storm “Paeng.”

These factors could not be offset sufficiently by the decrease in prices of other petroleum products and of pork, nor of the Philippine peso’s appreciation against the US dollar in November.

Last month, the BSP said they expected monthly inflation to peak either in November or December.

The central bank now suggests that the peak has been reached and that “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.”

Still elevated

First Metro and UA&P said in their latest monthly research that inflation will remain elevated at above 7 percent in the last two months of 2022, and average at 5.7 percent for the full year.

“However, we expect it to significantly ease to below 6 percent by the first quarter of 2023 as food and crude oil prices stabilize,” they added.

Michael Ricafort, chief economist at the Rizal Commercial Banking Corp., said the BSP could match any future increases in the policy rate of the United States Federal Reserve “if inflation remains high to help stabilize the peso and overall inflation.”

Ricafort noted that some upward pressures have been letting up, such as global crude oil prices which are near 10-month lows, erasing all the increase since the Russian invasion of Ukraine started last February.