PH November inflation accelerates to a 21-month high due to rising food prices

MANILA (TO UPDATE) – Philippine inflation accelerated in November to a 21-month high on the back of higher food prices caused by destructive storms and typhoons that ravaged the country, the state statistics office said on Friday.

The consumer price index rose at a faster annual pace of 3.3 percent last month, its highest level since February 2019.

This surpassed the range of 2.4 to 3.2 percent predicted by the Bangko Sentral ng Pilipinas Department of Economic Research for the month.

Inflation of food and non-alcoholic beverages doubled in November compared to October.

The BSP think tank previously said that the impact of storms and typhoons on the prices of rice and agricultural products, and higher domestic oil prices contributed to the upward price pressures, while lower electricity rates and the appreciation of the peso probably helped offset it.

Core inflation, which excludes volatile foods and fuels, stood at 3.2 percent.

Inflation averaged 2.6 percent in the January-November period, still below the midpoint of the official target range of 2 to 4 percent for the year.

On Thursday, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said that the central bank’s political action would continue to be data-driven.

“Nonetheless, inflation is expected to stay within the government’s target range of 3.0 percent plus or minus 1.0 percent for 2020-2022, as the impact of supply disruptions due to recent typhoons is expected to be largely transitory, “BSP said in a statement.

The BSP previously said that benign inflation has allowed it to cut interest rates in its attempt to stimulate the economy amid disruptions caused by the COVID-19 pandemic.

BDO Chief Market Strategist Jonas Ravelas shrugs off higher-than-expected inflation in November, as “this is a one-time, more driven by the impact of typhoons. Hopefully in the next few months, that should slowly dissipate, “he told ANC. Market advantage.

The economic damage from the coronavirus pandemic in the Philippines is more severe than previously thought, officials said Thursday, forcing the government to forecast a deeper contraction of 8.5% to 9.5% for the year.

The Philippine economy, which before the pandemic was one of the fastest growing in Asia, is likely to be much worse this year than the previous forecast of a 5.5 percent decline, although a strong recovery is expected for the next two years.

–with a Reuters report