BSP eyes October inflation to slow to 5.1% to 5.9%

FILE: A buyer checks the texture of red bell peppers sold at the Pasna-an Agricultural Cooperative at the Department of Agriculture-Kadiwa Center in Diliman, Quezon City on Tuesday (Feb. 7, 2023). Red bell pepper is sold at the stall at PHP150 per kilo. (PNA photo by Ben Briones)

MANILA – The Bangko Sentral ng Pilipinas (BSP) has forecast October’s inflation rate to decelerate to between 5.1 percent and 5.9 percent from September’s 6.1 percent, despite jumps in the prices of select food items, cooking gas, jeepney fares, and power rates.

In a statement issued Tuesday night, the central bank said upticks in electricity rates, liquefied petroleum gas, fruits, fish, and minimum jeepney fare by PHP1 both for traditional and modern jeepneys to PHP13 and PHP14, respectively, provide upside price pressures in the 10th month this year.

It, however, noted that the lower prices of rice, meat, and vegetables, as well as cuts in oil prices, are projected to provide downside pressures to the rate of price increases last month.

“Going forward, the BSP will continue to closely monitor developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy formulation,” it added.

At the end of the third quarter this year, inflation averaged 6.6 percent, way higher than the central bank’s 2 percent to 4 percent target range until 2024.

September’s inflation rate was the second consecutive month that the rate of price increases rose after a six-month decline, given the rise of oil prices in the international market.

BSP Governor Eli Remolona expects the inflation rate to remain elevated until the first half of 2024 but to decelerate within the target band by the third quarter of next year.