MANILA, Philippines – Inflation in the Philippines could ease to 4.1 percent this month as prices of oil in international markets continue to fall, UK-based investment bank Barclays said.
In a report, the bank said “lower oil prices will lead to a further moderation in inflation.”
Data showed that the price of Dubai crude, a benchmark for oil trading in Asia, fell to an average $79.77 per barrel from Nov. 3 to Nov. 26 as against the $86.65 per barrel average last month.
The government will release the official November inflation data on Dec. 5.
The Bangko Sentral ng Pilipinas last week forecast the rate to settle within 3.5 percent to 4.3 percent for November, a further deceleration from the 4.3 percent pace in October.
The central bank said stable food prices, dropping oil prices, and lower power rates should dampen any upside risks to inflation.
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As a result, BSP Governor Amando M. Tetangco Jr. said there is room for the central bank to keep its policy settings unchanged should inflation continue on a decelerating trend.
Inflation has averaged 4.3 percent in the 10 months to October, above the midpoint of the BSP’s three to five percent target range.
The central bank last month kept key policy rates steady on expectations the inflation will remain within the goals for this year until 2016. Earlier, the BSP hiked the overnight borrowing and overnight lending rates by a total of 50 basis points to ensure inflation will fall within target.
The policy-making Monetary Board will revisit policy settings on Dec. 11, its last rate-setting for the year.