Upward pressure on electricity rates as well as higher gasoline, LPG and selected food item prices could be offset by lower domestic rice prices and the appreciation of the peso.

Although inflation or the sustained increase in the price of goods and services is widely expected to normalize in the final two months of the year, a sub-1 percent rate report is possible in the November survey, the Bangko Sentral ng Pilipinas’ (BSP) said on Friday.

“The BSP Department of Economic Research (BSP-DER) projects November 2019 inflation to settle within the 0.9 to 1.7 percent range,” the central bank said.

The outlook builds on inflation already averaging 0.8 percent in October. However, the projected range was significantly higher than the 0.5 to 1.3 percent band forecast a month ago.

According to the BSP-DER, upward pressure on electricity rates as well as higher gasoline, LPG and selected food item prices could be offset by lower domestic rice prices and the appreciation of the peso.

“Looking ahead, the BSP will remain watchful of evolving inflationary conditions to ensure that the monetary policy stance remains consistent with the BSP’s price stability mandate,” the central bank concluded.

The outlook on inflation by various private sector economists share the same sentiment, their forecast range well within the BSP’s.

Union Bank of the Philippines chief economist Carlo Asuncion forecast a 1.3 percent inflation rate in November as the impact of so-called base effects begin to dissipate.

“While October 2019 recorded a year-low 0.8 percent, it is expected (that) an uptick may occur due to the lower base effect, year-on-year. UnionBank’s economic research unit sees 2019 inflation settling to 2.4 percent,” Asuncion said.

Likewise, Security Bank chief economist Robert Dan Roces pegged inflation in November to dip as low as 1 percent but no higher than 1.6 percent.

“Month-on-month price growth is estimated to be at 0.3 percent as higher demand at the onset of the holiday season caused price spikes for certain goods and services, that in turn offset the strength of the Philippine peso for the month,” Roces explained.

“Moving forward, we expect inflation to be at or slightly below 2 percent by December and our 2019 average inflation estimate is at 2.5 percent,” he added.

Earlier, Deputy BSP Governor Francisco Dakila Jr. said lower inflation will help boost consumption.

The BSP revised its 2019 inflation outlook from 2.5 percent to just 2.4 percent.