Philippines: Inflation to ease in Oct 18: BSP

• INFLATION likely eased in Oct 18, coming from a nine-year high in Sep 18, the Bangko Sentral ng Pilipinas (BSP) said on 31 Oct 18, suggesting the possible start of a downtrend as higher oil prices were offset by lower food and electricity costs.
• Prices of widely used goods likely rose 6.2%-7% in Oct 18, the BSP’s Department of Economic Research said on 31 Oct 18. This is slightly slower than the 6.3%-7.1% forecast given for Sep 18 which turned out as 6.7%, the fastest pace seen since Feb 09.
• “Upward price pressures from domestic petroleum prices and water rates in Manila Water (Company, Inc.) and Maynilad (Water Services, Inc.)-serviced areas could be offset by the lower prices of rice and other food items as well as the downward adjustment in Meralco power rates,” the central bank said, referring to the country’s biggest electricity distributor, Manila Electric Co.
• The BSP believes that inflation is slowly inching its way down. The central bank unit sees m/m inflation at -0.2% to 0.6%, confirming the government’s expectations that inflation may have peaked in 3Q18.
• For oil, the benchmark Dubai crude saw prices climb to four-year highs earlier in Oct 18 but later on eased amid increased US stockpiles and as the peso posted some recovery against the dollar.
• The recent spike in food prices may have also been clipped following four administrative orders from Malacañang directing the National Food Authority, the Sugar Regulatory Administration and the Department of Agriculture to lift non-tariff barriers and streamline import procedures for rice, sugar, meat and fish. These measures are meant to address supply bottlenecks and, in turn, bring down food costs.
• Some Monetary Board members have signalled that they could pause the tightening cycle should the inflation momentum show signs of easing. Still, the central bank said it will continue close monitoring of prices and will “undertake necessary measures” to ensure stability.

External Link: https://www.bworldonline.com/central-bank-sees-inflation-easing-from-october/

External Link: https://www.rappler.com/business/215671-inflation-peaked-q3-2018-bangko-sentral-forecast