BSP projects inflation to hit as high as 8.6% in December

Inflation is projected to hit as high as 8.6% this month due to higher prices of commodities and utilities, surpassing the 14-year high of 8.0% in November, the Bangko Sentral ng Pilipinas (BSP) said Thursday.

The central bank now sees inflation to fall between 7.8% to 8.6% in December, which BSP Governor Felipe Medalla earlier said is expected to be the peak before starting to decelerate by January 2023.

“Upward price pressures for the month are expected to emanate from higher electricity rates, uptick in the prices of agricultural commodities, elevated meat and fish products, and higher LPG prices,” the BSP said in an emailed statement.

Manila Electric Company (Meralco) hiked power rates by 32.97 centavos per kilowatt-hour (/kWh) to P10.2769/kWh, reflecting an increase of around P66 for residential customers consuming 200 kWh.

Prices of agricultural commodities have also continued to increase, with vendors charging as much as P720 per kilogram of red onions at the Las Piñas Public Market, way beyond the suggested retail price of P170.00 per kilogram.

Oil firms also hiked prices of liquefied petroleum gas (LPG) products for the second straight month in December.

The BSP said among the factors expected to offset the upward pressures include the reduction in petroleum and rice prices, along with the appreciation of the Philippine peso during the month.

Latest data available from the Department of Energy (DOE) show that year-to-date total adjustments stood at a net increase of P13.95 per liter for gasoline, P27.50 per liter for diesel, and P20.80 per liter for kerosene as of December 20, 2022.

“The BSP continues to monitor closely emerging price developments to enable timely intervention that could help prevent the further broadening of price pressures, in accordance with the BSP’s price stability mandate,” the central bank said.—AOL, GMA Integrated News