Headline inflation could have eased to 3.2 percent in November given “more stable” food prices, the Finance department said on Friday.
The forecast — within the 2 percent to 4 percent target for the year — is lower than the 3.5 percent recorded in October.
The Philippine Statistics Authority will release official November inflation data on Tuesday.
A forecast range of 2.9 percent to 3.6 percent for the month was earlier issue by the Bangko Sentral ng Pilipinas (BSP), which cited higher pump and utility prices.
Inflation a year earlier was just 2.5 percent.
In an economic bulletin, the Finance department said faster fuel and power price hikes were likely offset by an easing in food price growth.
It added that the country’s strong fundamentals, as shown in manageable inflation levels, would help sustain rapid growth and investments.
“Adequate supply of goods from higher production will further dampen inflation rise in the future. This will likewise temper the rise in interest rates despite the ongoing Fed tightening,” the department added.
The rise in prices of food and non-alcoholic beverages is expected to slow to 2.9 percent from 3.6 percent; alcoholic beverages and tobacco, to 6.2 percent from 6.8 percent; and education, 2.2 percent from 2.3 percent.
Slight increases, meanwhile, were forecast for housing, utilities and fuels (4.2 percent from 4 percent);
furnishings, household equipment (1.9 percent from 1.8 percent); recreation and culture (1.6 percent from 1.5 percent); and restaurant and miscellaneous services (2.7 percent from 2.6 percent).
Price growth is expected to remain unchanged for clothing and footwear (1.9 percent), health (2.2 percent), transport (4.2 percent), and communication (0.4 percent).
The Finance department noted that Manila Electric Co.’s per kilowatt-hour (KWh) rate for households consuming 200 kWh per month increased to P9.63 in November from P9.28 a month ago. Also, the price of diesel rose to P35.37 per liter from P34.51 in Metro Manila.
Gasoline prices also went up to P48.44 per liter from P46.89 in the metropolis.
October’s 3.5 percent inflation — a three-year high and up from 3.4 percent in September — was attributed to higher annual increment for non-food prices.
This brought average inflation to 3.2 percent for the first 10 months of the year, still within the target range of 2 percent to 4 percent.
The BSP’s policymaking Monetary Board took the result into account during its last meeting on November 9 when it decided not to touch benchmark interest rates.
Inflation forecasts for this year and 2018 were maintained but the outlook for next year was raised given upside risks. Still, the central bank said future inflation was expected to stay within target.