THE strong peso may have slowed the country’s inflation to at least 4 percent, the high end of the government’s target, in November, according to the Bangko Sentral ng Pilipinas (BSP).
In its month-ahead inflation estimate, the BSP said inflation in November may have settled within the range of 4 percent to 4.8 percent. This is slower than the 4.9 percent average recorded in October.
Based on central bank data, the peso averaged P55.812 to the greenback in November, the lowest since May when it traded P55.728 to the US dollar.
“The BSP will continue to monitor developments affecting the outlook for inflation and growth in line with its data dependent approach to monetary policy formulation,” read a statement the central bank issued.
The BSP added that lower prices of vegetables and petroleum products may have also slowed inflation.
The Philippine Statistics Authority (PSA) earlier noted that inflation in vegetables, tubers, plantains, cooking bananas and pulses was at 11.9 percent in October 2023, slower than the 29.6 percent in September 2023.
The October data also showed transport inflation slowed to 1 percent from 1.2 percent in September 2023.
Meanwhile, the BSP said prices of most agricultural products like rice, fruit, fish, and meat items have jacked up commodity prices in November.
In October, the PSA said food inflation at the national level eased to 7.1 percent in October 2023 from 10 percent in the previous month. In October 2022, food inflation was higher at 9.8 percent.
Food inflation contributed 50.6 percent or 2.5 percentage points to the overall inflation in October 2023. Cereals and cereal products, which includes rice, corn, flour, bread and other bakery products, with 51.6 percent share or 3.7 percentage points.
PSA data also showed vegetables, tubers, plantains, cooking bananas and pulses with a 12.9-percent share or 0.9 percentage point. The data also showed fish and other seafood with a 12.3-percent share or 0.9 percentage point.
The BSP said adjustments in electricity, LPG, and toll rates are also primary sources of upward price pressures last month.
In October, PSA said the top three commodity groups that contributed to the October 2023 overall inflation were led by Food and non-alcoholic beverages with 53.7 percent share or 2.6 percentage points.
Other sources of inflation in October were restaurants and accommodation services with 12.3-percent share or 0.6 percentage point; as well as housing, water, electricity, gas and other fuels with 11.3 percent share or 0.6 percentage point.
Image credits: Aldar Darmaev | Dreamstime.com