BSP Governor Rafael B. Buenaventura said that, as expected, November inflation slowed down further to 4.4 percent year-on-year from 5.4 percent in October. This brings the average inflation rate for 2001 to 6.3 percent, which is well within the Government’s 6-7 percent inflation target. The continued moderation in consumer prices was attributed to decelerating prices across all commodity groups, notably food, beverage and tobacco (FBT); fuel, light and water (FLW) and services, which includes domestic oil products.
Gov. Buenaventura added that the November inflation figure affirms the benign outlook for consumer prices in the near term. This expectation is also supported by the moderation in liquidity growth, broad exchange rate stability, and favorable trends in oil prices. These conditions could provide the basis for the further relaxation of monetary policy in the near term. Monetary policy in the months ahead will continue to be on a cautious footing, with a slight easing bias given expectations of tame inflationary pressures. At the same time, authorities will continue to monitor closely potential risks to the inflation outlook.