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September inflation seen as high as 7.1 percent

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The Bangko Sentral ng Pilipinas anticipate headline inflation to push as high as 7.1 percent in September, the BSP’s Department of Economic Research (DER) said in a forecast released on Friday.

It said the rate at which prices change was likely to accelerate from a low of 6.3 percent to a high of 7.1 percent.

The forecast builds on inflation already averaging 6.4 percent in August as supply-side restraints continue to hound commodities and goods across the $314 billion Southeast Asian economy.

But despite elevated inflation in September, the BSP remains firm in casting this year’s inflation target from a range of 2 percent to 4 percent.

According to the country’s economic managers, there is no need to change the target as continued inflation expansion was driven by supply-side factors.

They collectively said the government has proposed counter inflation measures only awaiting the signature of President Duterte.

Among the measures included pertain to the rice tariffication bill which seeks to replace the quantitative restrictions on rice imports with the imposition of tariffs or taxes seen to help address rice price pressures.

According to the bDER, the expanded inflation forecast may be attributed to higher key commodity prices such as rice and agricultural products due to typhoon Ompong.
It also said increased oil prices and further weakening of the peso contributed to the upside price pressures for the month.

“[We] will continue to remain on guard to evolving inflationary conditions to ensure that the monetary policy stance remains consistent with our price stability mandate,” the BSP said in a statement.

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