MANILA: The Philippine central bank said on Tuesday (Dec 5) it was necessary to keep monetary policy settings “sufficiently tight” and it was ready to take further action, highlighting its wariness of inflation despite a slowdown in the pace of increases.

The consumer price index climbed 4.1 per cent in November, the lowest rate of growth since March 2022 and less than the 4.3 per cent forecast in a Reuters poll. Inflation was 4.9 per cent in October.

The data from the Philippine Statistics Authority also showed food inflation at 5.8 per cent in November, the slowest annual rise since May 2022. Though rice prices increased to 15.8 per cent from 13.2 per cent, there were declines in the cost of vegetables.

“The Monetary Board deems it necessary to keep monetary policy settings sufficiently tight until a sustained downtrend in inflation becomes evident,” the Bangko Sentral ng Pilipinas said in a statement.

Average inflation for the year to date was 6.2 per cent, still far above the central bank’s 2 per cent-4 per cent target for the year.

The central bank said it is prepared to take appropriate action as needed to bring inflation back to its target range, adding that the balance of risks in the inflation outlook still leans significantly towards the upside.

Core inflation, which strips out volatile food and energy costs, was at 4.7 per cent in November versus 5.3 per cent the previous month.

The central bank, which meets for the last time this year on Dec 14, kept interest rates steady at 6.5 per cent at its meeting in November, after an off-cycle 25-basis point hike on Oct 26 amid worries that inflation could spiral out of control.

Source: Reuters