MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) said the inflation rate in the Philippines would rise in the last two months of the year following the massive destruction brought about by Super Typhoon Yolanda in the Visayas region.
BSP Governor Amando M. Tetangco Jr. said inflation is now seen averaging 3.2 percent this year and 4.5 percent in 2014, both are upward revisions of an October forecast of three percent and four percent, respectively.
Tetangco said that the BSP will announce the final full-year inflation forecast on Dec. 12, its last rate-setting meeting.
“(This is just) one of the scenarios in our modeling exercise (that will be) firmed up before (the) next policy meeting,” Tetangco said in a text message.
Typhoon Yolanda ravaged the Visayas region earlier this month, killing thousands, wiping out villages and destroying billions-of-pesos worth of agriculture and infrastructure.
BSP Deputy Governor Diwa C. Guinigundo said the jump in the inflation rate is one of the impacts of the natural disaster given possible supply shocks.
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“That’s the staff’s initial assessment considering the effects of the disaster,” Guinigundo said.
“(We) will continue to monitor until the last Monetary Board meeting on monetary policy in December,” he added.
The Monetary Board has kept overnight borrowing and lending rates at 3.5 percent and 5.5 percent, respectively, since the start of the year.
It has been able to do so on the back of the country’s robust economic growth and benign inflation environment.
The BSP is mandated to keep prices stable and ensure this is supportive of economic growth.