Besides the ample supply of meat, fish, and vegetable items in the market and the easing of commodity prices, the National Economic and Development Authority (NEDA) said the easing of logistics bottleneck in the port of Manila starting September might have also contributed to the abatement of price pressures in October.
In a statement on Wednesday, Socioeconomic Planning Secretary Arsenio Balisacan said the drop in commodities prices in the international market amid improved supply was reflected in local prices. However, this favorable impact was negated by the year-on-year upward adjustments in electricity charges during the period.
The agency noted that the price indices of electricity, gas and other fuels increased from 2.4 percent to 3.2 percent in October. Electricity prices increased as a result of the P0.67 per kilowatt-hour generation charge increase by the Manila Electric Co. (Meralco).
“Overall, the tempered (Oct) inflation outturn is expected to provide the BSP room to possibly keep its key policy rates steady,” Balisacan said.
At its October 23 meeting, the Monetary Board of the BSP decided to keep its existing rates for overnight borrowing and lending, as well as the rate for special deposit accounts (SDA) and the reserve requirement ratio (RRR) for banks.
The rate for the overnight borrowing or reverse repurchase facility was kept at 4.0 percent and the rate for overnight lending or repurchase facility remains at 6.0 percent. The interest rate for SDA was also left unchanged at 2.50 percent, as well as the 20-percent RRR for banks.
“On the external front, global economic prospects are expected to remain uneven, thus mitigating upward pressures on commodity prices,” said Balisacan.
The NEDA chief stressed that the government will remain vigilant against inflation risks and will continue efforts to ensure supply sufficiency of key commodities and to mitigate the impact of a possible dry spell.
“The government also continues to explore more lasting solutions to the port congestion problem to avoid disruptions in the domestic supply chain that could result in higher transportation costs,” he said.