The Bangko Sentral ng Pilipinas (BSP) forecasts inflation to have eased in October and should not top 5.9 percent or significantly lower than the headline print of 6.1 percent in September.
According to the BSP, the rate at which goods and commodities prices change likely ranged as low as 5.1 percent in October.
It acknowledged the higher prices of electricity, LPG, fruits, and fish, and the recent adjustment in jeepney fares were the primary sources of upward price pressures in October.
But the lower prices of rice, meat, and vegetables and the reduction in the prices of petroleum products could contribute to downward price pressures, the BSP said.
Headline inflation in the nine months to September averaged 6.6 percent, sharply higher than anticipated by the policy-making monetary board of the BSP and enough compulsion for the six-man body to embrace an off-cycle adjustment in the rate at which it borrows from the banks.
The 25 basis point adjustment on Thursday last week took the financial markets by surprise no matter that the BSP has since signaled that interest rates were likely to remain higher for longer in recognition of price pressures, particularly on food.
“Going forward, the BSP will continue to closely monitor developments affecting the outlook for inflation and growth in line with its data dependent approach to monetary policy formulation,” BSP governor Eli Remolona said.
