THE BANGKO SENTRAL ng Pilipinas (BSP) said headline inflation likely eased in December as local oil prices slipped, although Typhoon Odette may have pushed food prices higher.
The consumer price index (CPI) probably rose within the 3.5% to 4.2% range this month, BSP Governor Benjamin E. Diokno told reporters in a Viber message on Wednesday.
If realized, inflation could fall within the BSP’s 2-4% target.
To compare, headline inflation settled at 4.2% in November and at 3.5% in December 2020.
“Higher electricity rates along with the uptick in food prices due to weather disturbances are the primary sources of inflationary pressures during the month,” Mr. Diokno said.
The Manila Electric Co. earlier said the overall rate for typical residential consumers increased by P0.3143 per kilowatt-hour (/kWh) to P9.7773/kWh this month from P9.4630/kWh in November.
Agricultural damage caused by Typhoon Odette reached P8 billion, according to the latest estimate of the Department of Agriculture.
On the other hand, Mr. Diokno said the rollback in pump prices and the peso appreciation may have helped slow inflation.
For this month, the price of gasoline, diesel, and kerosene declined by about P0.50, P1.40, and P1.65 per liter, respectively, based on data from the Department of Energy (DoE).
A mandatory price freeze was implemented for kerosene in areas that were placed in a state of calamity due to Typhoon Odette, the DoE said. Some oil companies have also suspended price hikes for gasoline and diesel in typhoon-hit areas in Visayas and Mindanao.
Meanwhile, the peso has generally appreciated in December, thanks to the strong remittance inflows from overseas Filipino workers during the holidays. The peso’s best close so far this month was at P49.93 on Dec. 20, also its strongest finish since it closed at P49.85 on Nov. 12.
However, at its close of P50.46 on Tuesday, it depreciated by seven centavos from its P50.39 finish on Nov. 29.
“Looking ahead, the BSP will continue to monitor emerging price developments to help achieve its primary mandate of price stability that is conducive to balanced and sustainable growth of the economy,” Mr. Diokno said.
Headline inflation has exceeded the BSP’s target in 2021, except in July when it stood at 4%. This was mainly attributed to food supply issues. Inflation year to date is at 4.5%, which is still above the central bank’s 4.4% forecast for the year.
At its last policy review for the year on Dec. 16, the BSP kept rates at record lows as it cited the need to support growth amid the threat of the Omicron variant.
Mr. Diokno has said they are ready to respond to potential second-round effects of inflation. He noted constraints to the supply of key food items and petitions for transport fare hikes may cause faster inflation.
The Philippine Statistics Authority will release the December CPI report on Jan. 5, Wednesday. — Luz Wendy T. Noble