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BSP Reports Steady Inflation at 2.3%

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MANILA, Philippines – Philippine Statistics Authority (PSA) reported that in October, inflation remained at 2.3 percent, giving the Bangko Sentral ng Pilipinas (BSP) a reason to retain its pacifistic policy strategy.

PSA data showed that inflation remained at 2.3 percent due to commodity groups’ assortment of movements. In the first 10 months of 2016, the average inflation rate was 1.6 percent.

The indices of food, clothing, footwear, household materials, tools for house maintenance, materials for recreation, cultural products, and non-alcoholic beverages have higher increments this year.

Fish, fruits, and vegetables were recorded to have price increases. The food index alone rose from 3.1 percent in September to 3.5 percent last month.

In October, gasoline and diesel hikes, together with increased air and ship fares, were recorded.

The National Capital Region (NCR) and selected provinces experienced higher price adjustments for personal care products and clothing. Inflation in NCR jumped to 2.1 percent, which is a two percent increase from September’s record. Other areas’ inflation stood at 2.4 percent.

BSP Governor, Amando Tetangco Jr., stated that October’s inflation is within the central bank’s forecast, which ranges from 1.9 to 2.7 percent. Tetangco added that the result met their expectation and is projected to increase within the target in the next couple of years. Between this year and 2018, inflation target is between two to four percent.

The positive inflation environment and strong domestic demand gave way to BSP’s retention of its peaceful policy stance since September 2014.

As part of BSP’s operational adjustment with interest rate corridor (IRC) system’s shift, interest rates were reduced.

On November 10, the Monetary Board will conduct its seventh rate-setting meeting in 2016.

The governor stated that the financial segment will monitor pending proposals for increases in utility prices, domestic economical conditions, external global economic activities, and their outlook’s risk factors.

BSP Deputy Governor, Diwa Guinigundo understated the effect of Karen and Lawin, which are super typhoons that affected the country in October. He stated that proper measures were initiated by the government to avoid rice value hikes.

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