Inflation possibly resumed ascent in Dec, says Security Bank

MANILA  -It’s possible that inflation accelerated again in December 2023 due to high food prices amid the holiday season, according to analysts at Security Bank.

In a statement, the bank said it expects December inflation to have settled between 4 percent and 4.6 percent.

If the upper-end of the forecast range is realized, then the December print will be faster than the 4.1 percent recorded in November and will snap two straight months of decline.

At the same time, the projection will put the government away again from its 2 to 4 percent target range.

“Food inflation, which typically rises during the holiday season, may be the main driver of the increase,” Security Bank said.

“Restaurants and accommodation services inflation may also have contributed, as with personal care services,” it added.

The government is scheduled to release the December inflation data on Jan. 5.

READ: Inflation may hit 2-4% target range in Dec, says BSP

As it is, the Bangko Sentral ng Pilipinas’ (BSP) own projection pegged December inflation at 3.6 to 4.4 percent. The central bank said higher prices of rice and meat were the primary sources of upward price pressures in December.

But the BSP said those price hikes were offset by lower prices of other food items such as vegetables, fruits and fish. At the same time, cheaper electricity rates and lower petroleum prices also helped temper inflation in December.

READ: PH central bank says to keep policy tight despite an easing in inflation

Moving forward, a within-target inflation would ease the pressure on the BSP to keep its ultra-tight monetary policy settings.

BSP Governor Eli Remolona Jr. early this month said the central bank would only consider cutting its policy rate if both price growth and inflation expectations are in a “comfortable” range. INQ