October Inflation could settle within 2.9% to 3.8%

Posted at 10/26/12 10:38 AM

MANILA, Philippines - Inflation in October is expected to settle within 2.9% to 3.8%, the Bangko Sentral ng Pilipinas said on Friday.

BSP Governor Amando M. Tetangco, Jr. said as food supply remains sufficient to meet the demand, the strengthening of the peso is seen to temper increases in local prices of fuel and electricity.

Tetangco added the central bank remains watchful of developments abroad that could impact on local commodity prices.

Inflation in September eased to 3.6% after picking up to a seven-month high of 3.8% in August.

The BSP on Thursday trimmed its full-year forecast for inflation to 3.3% from 3.4%, still near the low-end of its target 3% to 5% range.

Despite the manageable inflation rate, the central bank cut its key policy rates by another 25 basis points also on Thursday amid peso gains and in order to provide the economy buffer against global headwinds.

The reduction brought overnight borrowing and lending rates to a new record low of 3.5% and 5.5%, respectively.