Inflation hits 9-mo high in Nov

MANILA, Philippines - Inflation rose to a nine-month high in November because of faster increases in prices of food, housing and utilities brought about by Super Typhoon Yolanda.

In a report, the National Statistics Office (NSO) said inflation rose to 3.3 percent in November from 2.9 percent in October.

The November figure was the fastest since February’s 3.4 percent and was up from 2.8 percent a year ago.

Despite the uptick, the November inflation was still at the low-end of the Bangko Sentral ng Pilipinas’ 3.3 percent to 4.1-percent target range.

Also, the average for the 11-month period stood at 2.8 percent, still below the BSP’s full-year target range.

Without food or oil prices, core inflation increased to 2.8 percent in November from 2.5 percent in October.

“Increments in the annual indices for food, housing, utilities resulted in the higher upturn. We could see inflation inch up in the coming months as more of the effects of the calamities become known,” BSP Governor Amando M. Tetangco Jr. said in a text message.

“Nevertheless, as experience in past natural calamities have taught us, we do not see these effects persisting,” he continued.

The BSP, mandated to keep prices stable and ensure these support economic growth, said current policy settings remain appropriate.

“Over the policy horizon, inflation is still seen to be within target,” Tetangco said.

“Policy settings therefore remain appropriate, but we stand ready to make adjustments as and when needed to address unforeseen developments,” he added.

The BSP’s policymaking Monetary Board has kept policy rates steady since the start of the year amid a strong economic growth and benign inflation environment.

The Monetary Board will revisit policy settings next on Dec. 12, their last meeting for the year.

The National Capital Region saw inflation climb to 1.9 percent in November from 1.1 percent in the previous month. Areas outside the capital, meanwhile, saw the rate rise to 3.8 percent from 3.4 percent.

By commodity group, the country saw a faster rise in the prices of food and non-alcoholic beverages, housing, furnishing and household items, and transportation in November from the previous month.

The food and non-alcoholic drinks index went up to 3.9 percent in November from 3.2 percent in October, while the housing index climbed to 1.9 percent from 0.8 percent.

The index of furnishing and household items increased to 2.3 percent from 2.2 percent, while the transportation index expanded to 0.7 percent from 0.5 percent.

Meanwhile, prices of alcoholic beverages and tobacco decelerated to 30.7 percent in November from 31 percent in October.

Prices of clothing and footwear also declined to 2.9 percent from three percent, while the index for restaurant and miscellaneous slid to 2.1 percent from 2.2 percent.

The indices for health (2.5 percent), communication (0.0 percent), recreation (2.5 percent), and education (4.7 percent) remained the same from the previous month.

UK-based Barclays said it expects the central bank to maintain key rates steady until the third quarter of next year even as inflation is seen to further increase in the coming months due to supply shocks following recent typhoons.

“We continue to expect the Bangko Sentral ng Pilipinas to look through supply-shock-driven rises in inflation,” Prakriti Sofat, regional economist at Barclays, said in a research note yesterday.