Inflation is seen peaking in October or November but would unlikely hit 7 percent, a member of the central bank’s policy-making Monetary Board said Tuesday.
The Cabinet-level Development Budget Coordination Committee raised its 2018 inflation forecast range to 4.8-5.2 percent from 4-4.5 percent during its previous meeting in July.
For 2019, economic managers see headline inflation averaging between 3 percent and 4 percent, while they expect the rate of increase in prices of basic goods to return within the 2-4 percent target range starting 2020.
In September, inflation reached a new over nine-year high of 6.7 percent, bringing the nine-month average to 5 percent, above the government’s target.
Monetary Board member Felipe M. Medalla told a press conference that inflation could still go up next month, later clarifying to reporters that he meant October or November.
But Medalla said the year-on-year rate would not reach the 7-percent level, citing his personal computation.
As for the month-on-month price increases, Medalla said these would have had peaked already this month and decline starting November.
“We expect the month-on-month to start normalizing already. But because of the year-on-year, which is an accumulation of 12 months, [inflation] may still go up,” Medalla said.
As far as monetary policy is concerned, Medalla said: “If there are signs that inflation is already abating as measured by the month-on-month, we may take a pause. But that is too early to tell at this point.”
The Bangko Sentral ng Pilipinas already raised the key interest rate by 150 basis points so far this year, with back-to-back 50-bp hikes delivered in August and September.
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