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November Inflation Rises to 3.3 Percent


Headline inflation increased to 3.3 percent year-on-year in November from 2.9 percent in October. The November reading was at the low end of the BSP’s forecast range of  3.3-4.1 percent for the month. The resulting year-to-date average inflation rate of 2.8 percent was below the Government’s inflation target range of 4.0 percent ± 1.0 percentage point for 2013. Likewise, core inflation—which excludes certain food and energy items to measure generalized price pressures—rose to 2.8 percent in November from 2.5 percent in the previous month. Month-on-month headline inflation was higher at 0.4 percent from 0.1 percent in October.

The higher November headline inflation rate was traced mainly to higher food, electricity, and domestic petroleum prices. Some tightness in domestic supply conditions—triggered by recent weather-related production disruptions—led to higher prices of some food items, particularly rice, fish, and vegetables. Similarly, upward adjustment in electricity rates due to the increase in generation, transmission, and system-loss charges, as well as higher gasoline and LPG prices contributed to the increase in non-food inflation for the month. However, there may be an undercoverage of the impact of Typhoon Yolanda on the price indices because the price survey in some affected areas was disrupted by the weather disturbance. It is expected that the impact of Typhoon Yolanda on prices would be reflected more adequately in the succeeding months.

Governor Amando M. Tetangco, Jr. said that, with temporary supply-side factors at play, the latest inflation reading remains in line with the BSP’s assessment of a benign inflation environment over the policy horizon and affirms the appropriateness of the current monetary policy stance. Going forward, the BSP will continue to monitor evolving price and output developments to ensure that the monetary policy stance remains consistent with ensuring price and financial stability while supporting sustainable economic growth.

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