The Bangko Sentral ng Pilipinas (BSP) said Wednesday domestic inflation likely reached its peak last September, projecting the October figure to settle within a range of 6.2 to 7 percent.
In a statement Wednesday, the central bank said its Department of Economic Research (DER) forecasts the month-on-month change to be within -0.2 to 0.6 percent.
This range, it said, “is in line with the BSP’s assessment that inflation is likely to have peaked in third quarter 2018 in the absence of further price shocks.”
Last September, inflation rose to a multi-year high of 6.7 percent due to the faster rate of price increases of the heavily-weighted food and non-alcoholic beverages index due to supply issues.
In the first nine months this year, inflation averaged 5 percent, exceeding the government’s 2-percent to 4-percent target band, which is also the target until 2020.
With the sustained rise of inflation, the government has put in place several measures targeted to ensure enough supply of rice, vegetable, meat, and other food items in a bid to address supply issues.
These measures include the release of rice stocks stored in National Food Authority (NFA) warehouses nationwide, which, in turn, are expected to reduce rice prices.
The BSP explained the lower prices of rice and other food items, as well as reduction in power rates in areas being serviced by the Manila Electric Company (Meralco), are seen to counter the rise of domestic petroleum prices and water rates in Manila Water and Maynilad-serviced areas.
“Moving forward, the BSP will continue to closely monitor evolving trends in prices and inflation expectations and will undertake necessary measures towards its commitment to price stability,” it added.