BSP sees Nov. inflation to be between 2% and 2.9%

Inflation rate in November is likely to land somewhere between 2 and 2.9 percent, Bangko Sentral ng Pilipinas (BSP) Gov. Amando Tetangco Jr. said over the weekend. Tetangco attributed the improving inflation forecast to the continued strength of the peso against the greenback and the lower rice prices. “A mix of increases in utilities and certain food items could have been offset by the peso’s strength and lower rice prices due to increased palay production," he told reporters. The peso has been gaining strength on the back of sustained foreign inflows that have pushed the country’s gross international reserves to $56.8 billion as of end-October. The BSP reiterated that the influx of foreign funds would not inflate the prices of goods and services. The central bank has also been keeping the lid on liquidity levels even before the surge of foreign inflows became worrisome. Tetangco has repeatedly said that while liquidity levels are rising, so has the level of bank lending. This indicates that funds are not lying idle but are being put to productive use, he said. Both Tetangco and BSP Deputy Gov. Diwa Guinigundo ruled out any near term adjustments to present monetary policy settings. They, however, vowed to continue monitoring events “to ensure that our policy stance remains appropriate." Inflation rate in October reached 2.8 percent, putting the year-to-date average to only 4 percent or well within target range of 3.5 percent up to 5.5 percent this year. – JE/KBK, GMANews.TV