Subdued Nov. inflation expected, but Christmas uptick possible

THE subdued 4.1 percent inflation figure in November did not come as a shock to economists and retailers alike, who noted the easing of price pressures last month.

Carlos Manapat, economics department chair at the University of Santo Tomas, on Tuesday, Dec. 5, said inflation was flat in November partly due to subdued volatility in world crude prices that in turn, kept local pump prices relatively stable.

Last month’s inflation numbers fell within the Bangko Sentral ng Pilipinas’ (BSP) forecast range of 4.0 to 4.8 percent.

The latest inflation outturn is consistent with expectations that price pressures “will moderate over the near term due to easing supply-side price pressures and negative base effects,” the monetary regulator said.

Manapat, however, pointed out that inflationary pressures are likely to pick up in December as money in circulation grows and Christmas spending reaches its peak.

He explained that the comparatively steady prices in October and November are likely to give way to upward pressures this month, but this supposedly imminent uptick is cyclical and is not worrisome.

“We will see a combination of cost-push and demand-pull inflation this month as 13th-month pay is released and consumers begin Christmas shopping. There is real momentum for an increase in December,” he told the Philippine News Agency.

Meanwhile, Steven Cua, president of the Philippine Amalgamated Supermarkets Association (PAGASA), confirmed that suppliers of basic commodities made no significant adjustment to the prices of their goods since the beginning of the fourth quarter, which moderated inflationary forces.

He said the supply of Christmas items that would make it to retailers’ shelves in the coming days would dictate whether or not the pressure to raise prices would make a comeback this month.

“It’s really a supply and demand thing. If the quantity of highly sought-after goods is low this year, then of course, prices will spike. I can probably give you better insights 10 days before Christmas… by then we will know,” he added.

PAGASA’s nationwide membership is composed mostly of small- and medium-sized supermarkets. (PNA)/PN