BSP Governor Rafael B. Buenaventura welcomed the news that the October inflation rate slowed down further to 5.4 percent year-on-year from 6.1 percent in the previous month. The continued moderation in consumer prices was attributed to lower prices across all commodity groups, notably food, services, housing and energy-related products.
Gov. Buenaventura pointed out that with a year-to-date average inflation rate of 6.5 percent, authorities have reasonably firm expectations that the 6-7 percent inflation target for 2001 will be achieved. Going forward, the Governor identified favorable supply-side conditions that may provide a stabilizing influence on headline inflation in the months ahead. These include factors such as ample food supply, softening oil prices, and a relatively stable exchange rate.
The Governor also expressed the view that the prospect of a generally benign inflation environment amid the risks of the present global downturn can provide some scope for a growth-supportive monetary policy stance. Monetary authorities, however, will continue to monitor evolving market developments, both in the domestic and external fronts and adopt appropriate policy responses that will keep inflation along the target path.