Inflation rate may spike between 3.8 percent and 4.7 percent in December on the account of typhoon-related disruptions, the Bangko Sentral ng Pilipinas (BSP) said on Thursday.
In a text message, BSP Governor Amando Tetangco Jr. attributed the central bank’s higher inflation outlook for the last month of the year to the typhoon-related price hikes in some commodities and utilities.
“The BSP projects inflation in December to settle between 3.8 percent and 4.7 percent given higher electricity prices, increase in fuel prices and lingering price pressures on some food commodities as a result of [Super] Typhoon Yolanda,” Tetangco said.
Following the devastation made by the super typhoon, the central bank warned of supply disruptions in the flow of goods that could lead to a higher inflation.
Data from the National Disaster Risk Reduction and Management Council showed that the damage caused by Yolanda to infrastructures and agriculture reached the P35.5-billion mark. The damage to infrastructure was at P18.2 billion while damages in the agriculture sector was estimated at P17.3 billion.
On the other hand, the BSP governor assured that the country’s monetary authority would maintain its vigilance in inflation monitoring.
“Going forward, the BSP will remain vigilant in monitoring price pressures to ensure price stability conducive to a balanced and sustainable economic growth,” he stated.
Inflation targeting is an approach to monetary policy that involves the use of a publicly announced inflation target set by the government, which the BSP commits to achieve over a two-year horizon.
Promoting price stability is the central bank’s main priority, and the target serves as a guide for the public’s expectations about future inflation, allowing them to plan ahead with greater certainty.
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.
For this year, the BSP is seeing a 2.9-percent average inflation rate.