By Chino Leyco
The Bangko Sentral ng Pilipinas (BSP) said Tuesday the rate of increase in consumer prices likely failed to peak in the third quarter as the level is seen to further accelerate this month.
In a briefing following the economic managers’ meeting, BSP Monetary Board member Felipe M. Medalla said that October inflation may be higher than the rate registered in September of 6.7 percent.
Medalla, meanwhile, said that month-on-month inflation has started to taper off, adding the rate likely peaked in September.
“We expect the month-on-month to start normalizing already,” Medalla told reporters. “But year-on-year, there’s no guarantee that it will be lower [than September’s].”
Medalla’s statement came after BSP Deputy Governor Diwa Guinigundo said that inflation may have peaked at 6.7 percent last month.
“Barring unforeseen events in the last quarter of the year, we could have seen the peak of inflation in recent period and initial signs of disinflationary trend through 2020,” Guinigundo said last October 5.
The September inflation was the highest for the consumer price index (CPI) in nearly a decade or since hitting 7.2 percent in February 2009.
In the first nine months, inflation exceeded the central bank’s two to four percent target.
The inter-agency Development Budget Coordination Committee (DBCC) revised upward its inflation forecasts for 2018 and 2019 due to higher crude prices in global markets.
The government expects inflation to settle around 4.8 percent to 5.2 percent this year from an earlier estimate of 4.0 percent to 4.5 percent.
The DBCC, meanwhile, expects Dubai crude oil to average between $70 and $75 per barrel this year.
The Duterte administration is currently pursuing non-monetary measures such as more rice importation approved by the National Food Authority (NFA), as well as all-out campaign against profiteering and hoarding especially after Typhoon Ompong battered the country last month.
The Department of Finance (DOF) earlier said that rice was the culprit for higher than expected inflation this year as the agency noted that the contribution of the staple food to the rate of increase in consumer prices skyrocketed by tenfold.
the Finance department said the contribution of rice has risen by 10-times to one percentage point of the inflation rate in the first nine months of the year, which also fuelled the cost of basic food items such fish, meat and vegetables.
Based on the Philippine Statistics Agency (PSA) data, rice was the number one contributor to inflation in September 2018, while food items in the consumption basket accounted for more than half of the inflation rate in the same month.