The impact of the damages caused by Typhoon Santi could have triggered a higher inflation rate this month, according to the Bangko Sentral ng Pilipinas (BSP).
In a text message, BSP Governor Amando Tetangco Jr. said that inflation in October could settle within a range of 2.8 percent to 3.6 percent.
He added that food prices particularly rice and fresh vegetable were higher during the month because of the damages caused by the typhoon.
Data from the Department of Agriculture showed that Santi caused about P2.9-billion worth of damages in agriculture in Central Luzon, particularly in the rice production in Aurora and Nueva Ecija provinces.
Despite this, Tetangco noted that the central bank’s inflation forecast for the month remains consistent within target inflation rate for 2013.
“Going forward, the BSP will continue to closely monitor the factors that affect movements in prices, in line with the BSP’s primary mandate of delivering price stability conducive to a balanced and sustainable economic growth,” he stated.
In its latest Monetary Board meeting, the BSP said that inflation expectations remain firmly anchored within its target range of 3-percent to 5-percent for 2013 to 2014 and 2-percent to 4-percent for 2015.
The central bank also retained its inflation forecast for 2013 to 3 percent. However, there were slight changes in the monetary authority’s inflation forecast for the next two years.
Inflation for 2014 was seen at 3.9 percent, down from the previous estimate of 4 percent. For 2015, the BSP’s inflation forecast was at 3.4 percent, lower than the 3.5 percent previous estimate.
Benign inflation environment also prompted the Monetary Board to keep the BSP’s key monetary policy rates at bay.
Reverse repurchase rate remained at 3.5 percent, while the repurchase rate was kept at 5.5 percent. The reserve requirement ratios were kept steady as well, while special deposit account rate was retained at 2 percent.