MANILA (Reuters) – Philippines’ annual inflation likely quickened for the first time in six months in November on higher food prices and fading base effect, but the expected number will be below the central bank’s comfort range for the year, a Reuters poll showed.
The median forecast of 10 economists for the headline consumer price index (CPI) stood at 1.3% in November from a year ago and within the central bank’s 0.9%-1.7% forecast for the month. In October, the CPI rose 0.8%.
The pace of price increase was widely expected to gather pace after October as the base effect of high prices from last year started to fade away.
Inflation had peaked at a near-decade high of 6.7% in September and October last year.
The poll also forecast inflation to average 2.5% this year and 3.1% next year, well within the central bank’s 2%-4% target for both years.
Cooling inflation has allowed the central bank to cut interest rates by a total of 75 basis points (bps) to 4.0% this year, reversing some of last year’s rate hikes, which totaled 175 bps.
The central bank also reduced the amount of cash that banks must hold as reserves by 400 bps this year, bringing the ratio to 14%, consistent with its medium-term plan to bring it to single digit levels.
Bangko Sentral ng Pilipinas Governor Benjamin Diokno has said a fourth interest rate cut was still possible at the central bank’s Dec. 12 policy meeting, which would be the last for the year.