THE overall rise in commodity prices likely accelerated in December on the back of an uptick in electricity rates and oil prices as well as price pressures on certain food items due to weather-related incidents, the Bangko Sentral ng Pilipinas (BSP) said.
“The BSP Department of Economic Research projects December 2019 inflation to settle within the 1.8 — 2.6 percent range,” it said in a statement on Friday.
The range is higher than the 1.3% print logged in November. However, this is lower compared to the 5.1% headline inflation recorded in December 2018.
“Higher electricity rates and oil prices together with the impact of weather-related disturbances on selected food items are the primary sources of upward price pressures for the month,” the BSP said.
Manila Electric Co. (Meralco) said in early December that consumers will see an increase in their bills this month as prices rose in the spot market.
The generation charge for December stood at P5.1967 per kilowatt-hour (/kWh), up by P0.1650 per kWh from the November rate. With this, power users in Metro Manila and surrounding areas may see their December bills increase by P0.3044/kWh, Meralco said.
Meralco said households with electricity consumption of 200 kWh can expect December rates to rise to P9.8623/kWh from P9.5579/kWh in November. This translates to roughly a P61 increase in their monthly bill.
“Meanwhile, inflation could be tempered by the continued easing of domestic rice prices,” the BSP said.
Economists have attributed the decline in local rice prices to the implementation of the Rice Tariffication Law (RTL) or Republic Act 11203 which banned quotas on rice imports.
“RA 11203 is possibly the single most effective inflation fighting development in 2019 and will likely help keep inflation in-check going into 2020,” ING Bank NV-Manila Senior Economist Nicholas Antonio T. Mapa said in a note sent to reporters on Dec. 24.
Inflation in November averaged 2.5% in the first 11 months of the year, which is still well within the central bank’s 2-4% target range in 2019.
“Looking ahead, the BSP will remain watchful of evolving price trends and ensure that the monetary policy stance remains appropriate to maintain price stability that is conducive to a balanced and sustainable economic growth,” the BSP said.
The Philippine Statistics Authority will release the official data on December inflation on Jan. 7. — Luz Wendy T. Noble