The rate of increase in prices of goods and services in the Philippines in November may have accelerated to as much as 8.2 percent—the worst that government economists expected—as many analysts’ forecasts point to figures higher than October’s 7.7 percent, already the highest in 14 years.
ING Bank pinned November inflation at the upper end of the Bangko Sentral ng Pilipinas’ (BSP) forecast range of 7.4 percent to 8.2 percent.
The Dutch bank’s economic research team agreed with the BSP in blaming the further rise of inflation on higher food prices that resulted from extensive crop damage due to typhoons.
The BSP ”is likely to retain its hawkish bias to close out the year although Governor Felipe Medalla has recently hinted that a pause may be in the cards as early as the first quarter of 2023,” ING Bank said in a commentary.
Vegetable prices
On Dec. 2, Medalla said in an interview with Bloomberg TV that policy rate hikes might continue—albeit at a slower pace—up to mid-2023, after which he said there was a possibility of reductions.
Goldman Sachs, meanwhile, expects inflation in November to have hit 7.9 percent year-on-year.
This was “mainly due to higher vegetable prices and increases in fuel and electricity costs,” Goldman Sachs said.
The American financial services firm noted that the October readout was 1.2 percent higher than September’s data.
Robert Dan Roces, chief economist at Security Bank Corp., expects a November print of 7.8 percent, which is the midpoint of the BSP’s forecast range.
Roces’ own forecast range is narrower at 7.6 percent to 8 percent.
Also echoing the BSP, he said upward price pressures were expected to have come from higher prices of electricity and liquefied petroleum gas, as well as agricultural commodities in the aftermath of severe tropical storm “Paeng” (international name: Nalgae).
“Inflation pressures may continue into the peak holiday month of December, and this will remain the key consideration versus the price stability mandate of the BSP,” Roces said.
“We expect the BSP to hike by 50 basis points [or 0.5 percentage point] in its December meeting with scope to do more in the first quarter of 2023 until inflation cools.” INQ