Higher electricity rates and oil prices, as well as food insecurity resulting from weather-related disturbances, have caused inflation to rise up quickly.
According to the Bangko Sentral ng Pilipinas, inflation might reach a rate between the range of 1.8 to 26 percent in December.
This is alarming, considering the rate was just 1.3 percent in November.
On the other hand, BSP’s Department of Economic Research claimed that because of the implementation of the Republic Act 11203 or the Rice Tariffication Law, domestic rice prices continued to fall.
According to Phil Star, these falling rice prices tempered the upside price pressures this December.
Inflation to be Heavily Monitored by BSP
The Central Bank, however, promised to continue monitoring evolving price trends to ensure that its monetary policies will be sound all the time.
It promises always to have monetary policies appropriate for maintaining price stability, which is crucial for both sustainable and balanced economic growth.
From January to November, inflation reached an average of 2.5. However, this is still well within the BSP target of 2 to 4 percent.
Based on its latest assessment, BSP claimed that the inflation rate could average 2.4 percent in 2019.
It might increase to 2.9 percent in both 2020 and 2021, according to the bank’s estimates.
Risks of upward trends in the near term are attributable to the possible volatility of international oil prices.
The geopolitical conflicts taking place in the Middle East these days caused oil prices to fluctuate.
The African swine fever outbreak is another reason. Food insecurity due to weather issues can contribute to this risk as well.
Simultaneously, however, the increase in commodity prices can be stemmed by downward global economic activities.
Uncertainty over trade policies in major economies, not limited to the United States and China, could slow down the growth in the global economy. This would then mitigate the upward prices of goods.
Rice Prices to Remain Stable
As reported by Inquirer, the inflation rate surged to 5.2 percent in 2018. At the time, the rate was due to skyrocketing rice as well as oil prices.
However, for December 2019, month-on-month price growth will likely remain only at 0.2 percent.
According to Security Bank economist Robert Dan Roces, growth will be steady, despite higher demand for certain holidays during the holidays, such as electricity and fuel.
Roces explained that people could anticipate prices for certain foods to increase.
The same goes for alcoholic beverages and tobacco.
Rice prices will remain stable.
The end of harvest reason ensures the proper level of supply to meet rice demand.
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