BSP sees softer October inflation

MANILA  -Inflation possibly eased in October as lower prices of key food items, including rice, offset costlier electricity bills and jeepney fares during the month, the Bangko Sentral ng Pilipinas said.

Consumer price growth may have settled between 5.1 percent and 5.9 percent last month, the BSP said in a statement released Tuesday night.

If the projection comes true, the upper-end of the forecast range would mark a softening from the resurgent inflation recorded in September, when price growth sizzled to a four-month high of 6.1 percent.

But a possible easing of price pressures in October would not be enough to bring inflation back to the BSP’s 2 to 4 percent target range. The government will release the October inflation data on Nov 7.

Nevertheless, a potential slowdown in price growth last month could convince the BSP to slam the brakes on rate hikes at the Nov 16 meeting following an off-cycle decision last week to lift the key rate by 25 basis points to 6.5 percent.

READ: BSP delivers ‘urgent’ anti-inflation rate hike

As it is, Governor Eli Remolona Jr. said the Monetary Board would look into emerging data—including the third quarter gross domestic product figure to be released on Nov 9—before making their next policy move this month.

Explaining its forecast, the BSP said higher prices of electricity, LPG, fruits, and fish, as well as the recent adjustment in jeepney fares are the primary sources of upward price pressures in October.

Meanwhile, lower prices of rice, meat, and vegetables along with the reduction in the prices of petroleum products could contribute to downward price pressures.

“Going forward, the BSP will continue to closely monitor developments affecting the outlook for inflation and growth in line with its data dependent approach to monetary policy formulation,” the central bank said.