‘Yolanda’ boosts inflation

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The Bangko Sentral ng Pilipinas (BSP) is seeing higher inflation rate for this year and for the next year, noting that supply disruptions have been caused by Super Typhoon Yolanda.

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BSP Governor Amando Te¬tangco Jr. said that the impact of the super typhoon in the supply of goods could trigger higher inflation rate in the last two months of 2013.

The central bank said that the higher inflation rate estimate for November and December could bring average inflation for 2013 to 3.2 percent from a previous forecast of 3 percent.

For 2014, the BSP governor said that inflation could be as high as 4.5 percent from its previous estimate of 3.9 percent.

“[This is] one of the scenarios in our modeling exercise . . .” Tetangco said in a text message.

He added that the latest BSP inflation forecast will be firmed up before the next policy meeting of the Monetary Board (MB).

Meanwhile, BSP Deputy Governor for the Monetary Stability Sector Diwa Guinigundo also in a text message affirmed that the latest estimate was an initial assessment on the aftermath of Yolanda.

“That’s the staff’s initial assessment considering the effects of the disaster. Will continue to monitor until the last MB meeting on monetary policy in December,” he said.

The said inflation estimate was still within the BSP’s its 3-percent to 5-percent target band for 2013 and 2014.

Earlier, National Economic and Development Authority Director General and Socioeconomic Planning Secretary Arsenio Balisacan said that inflation may go up in the typhoon-hit areas in Visayas, “as product shortages in the region became evident because of the disruptions brought about by the Super Typhoon Yolanda.”

Balisacan said that shortages caused by limited food supplies, access, supply disruptions because of connectivity and transport problems could push prices up in the Visayas region.

Latest report from the National Disaster Risk Reduction and Management Council showed that the total cost of damage in Yolanda-hit regions have reached about P10.39 billion, with about P9.09 billion damages to the agriculture sector.

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