Year-on-Year headline inflation decelerated slightly to 3.3 percent in November from 3.5 percent in October in line with BSP staff forecasts. This brought the year-to-date average inflation to 3.2 percent which remains within the Government’s target range of 3.0 percent ± 1.0 percentage point for 2017. Meanwhile, core inflation—which excludes certain volatile food and energy items as a means to depict underlying price pressures—rose slightly to 3.3 percent in November compared to 3.2 percent in the previous month. On a month-on-month seasonally-adjusted basis, headline inflation was steady at 0.3 percent in November.
The lower November headline inflation was traced mainly to slower price increases in selected food items, particularly fruit and rice due to the start of the harvest season. At the same time, vegetables, sugar, jam, and honey posted negative year-on-year inflation rates in November, which also helped pull down inflation. The deceleration was slightly offset by the rise in non-food inflation as a result of upward price adjustments for gasoline, diesel, liquefied petroleum gas (LPG), and kerosene due to the higher international price of crude oil as well as higher power rates in several regions.
Governor Nestor A. Espenilla, Jr. noted that the latest inflation reading remains in line with the BSP’s assessment of a manageable inflation environment over the policy horizon, with average inflation expected to settle slightly above the midpoint of the 2-4 percent target range for 2017-2019. The overall inflation outlook, output developments, liquidity, and credit activity, will be comprehensively reviewed by the Monetary Board on 14 December 2017 as part of the regular monetary policy assessment process.