(Updated with the addition of BSP statement, details of PSA data)
Headline inflation slowed further to 3.7 percent year-on-year in November from 4.3 percent in October, but gained pace from 3.3 percent a year earlier, official data showed on Friday.
The November rate released by the Philippine Statistics Authority (PSA) came within the central bank’s forecast range of between 3.5 percent and 4.3 percent for the month, as well as private analysts’ estimates of between 2.5 percent and 4.1 percent.
Compared with the inflation rate in October, the rise in prices in November marked a deceleration in the indices for food and non-alcoholic beverages; housing, water, electricity, gas and other fuels; furnishing, household equipment and routine house maintenance; as well as transport.
Year-to-date average 4.3%
Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said the inflation figure for November brings the year-to-date average to 4.3 percent, which he said is an indication that the government remains on track for its inflation target range of 3 percent to 5 percent this year.
In a text message to reporters, Tetangco stressed the likelihood of continued manageable inflation on the back of lower international oil prices and a firmer peso.
“Over the policy horizon, we will continue to monitor global developments, particularly possible volatility in international commodity prices that could result from current ultra-low prices, the growth prospects in the US and EU, the path of normalization in advanced economies,” he said.
On the domestic front, the BSP governor said the central bank will monitor how these global developments will affect domestic growth prospects and inflation.
“We are also watchful for the impact of impending natural calamities. We will adjust the stance of policy as necessary to respond to the emerging balance of risks to inflation,” Tetangco added.
UK-based investment bank Barclays said the November rate came as a “downside surprise” against its 4.1 percent projection and the consensus forecast of 4 percent.
The “November CPI [consumer price index]inflation was below our forecast and consensus, largely owing to a lower-than-expected increase in food prices. The decline in oil prices is also [trickling]through to the economy,” Rahul Bajoria, economist at Barclays, said.
Slowdown in Metro Manila
Consumer prices in Metro Manila eased to 2.4 percent from 3.6 percent in October but accelerated from 1.9 percent in November 2013, according to the PSA data.
In areas outside Metro Manila, inflation continued to move slowly at 4 percent from 4.5 percent the preceding month but faster than the 3.8 percent recorded a year earlier.
Excluding selected food and energy items, core inflation eased to 2.7 percent in November from 3.2 percent in October and 2.8 percent in the corresponding period last year.