Headline inflation could fall to as low as 0.1 percent this month, the Bangko Sentral ng Pilipinas (BSP) said on Tuesday, with cheap fuel offsetting the impact of Typhoon Lando.
With consumer prices having eased to a fresh low of 0.4 percent in September and the Finance department projecting a further drop to 0.3 percent, central bank governor Amando Tetangco Jr. offered a forecast range of 0.1 percent to 0.9 percent.
October inflation data will be released by the Philippine Statistics Authority on November 5.
“BSP forecasts October inflation could remain low and settle within [the]0.1 percent to 0.9 percent range,” Tetangco said in a text message to reporters.
For September, the central bank had forecast inflation falling within 0.2 percent to 1 percent. It offered the same range in August, during which consumer prices actually eased to 0.6 percent from 0.8 percent in July.
Tetangco said a transitory uptick in food prices in Lando-affected areas and higher liquefied petroleum gas (LPG) and diesel prices could be offset by downward adjustments in power rates and regular gasoline prices.
The central bank’s October forecast is well below the 2 percent to 4 percent target for the year. Year-to-date inflation was also below target at 1.6 percent as of October.
At the start of the month, oil companies Petron Corp. and Eastern Petroleum Corp. increased the price of their LPG products by P1.65 per kilo.
Oil firms also implemented price hikes for diesel and gasoline earlier in the month but have cut pump prices in the last two weeks, with a hefty P1 per liter reduction for gasoline implemented Tuesday.
Manila Electric Co., meanwhile, announced a P0.13 per kilowatt-hour (kWh) drop in residential rates. With the drop, the utility firm said, the total cost per kWh fell to P8.42 per kWh, which it said was the lowest since January 2010.
“BSP will remain watchful of price developments to ensure its primary mandate of price stability conducive to balanced and sustainable eco growth is achieved,” Tetangco said.
The central bank expects 2015 to fall below target at 1.6 percent.