MANILA (UPDATE) - Philippine inflation quickened in November to a 21-month high driven by higher food prices caused by destructive storms and typhoons which ravaged the country, the state statistics bureau said on Friday.
The consumer price index rose at a faster annual pace of 3.3 percent last month, its highest since February 2019.
This was beyond the 2.4 to 3.2 percent range forecast by the Bangko Sentral ng Pilipinas' Department of Economic Research for the month.
Food and non-alcoholic beverage inflation doubled in November from October.
The BSP think tank earlier said that the impact of storms and typhoons on prices of rice and agricultural products, and higher domestic oil prices contributed to upward price pressures, while lower electricity rates and the appreciation of the peso likely helped offset it.
Core inflation which strips out volatile food and fuel items, came in at 3.2 percent.
Inflation averaged 2.6 percent in the January-November period, still below the midpoint of the official 2 to 4 percent target range for the year.
On Thursday, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said the central bank's policy action would remain data-driven.
"Nonetheless, inflation is expected to settle within the government’s target range of 3.0 percent plus or minus 1.0 percent for 2020-2022 as the impact of supply disruptions due to recent typhoons is expected to be largely transitory," BSP said in a statement.
The BSP earlier said that benign inflation has allowed it to reduce interest rates as it attempts to stimulate the economy amid the disruptions caused by the COVID-19 pandemic.
BDO’s chief market strategist Jonas Ravelas shrugs off the higher-than-expected inflation in November, as "this is a one-off, more driven by impact of the typhoons. Hopefully in the coming months, that should slowly dissipate," he told ANC's Market Edge.
The economic damage brought by the coronavirus pandemic on the Philippines is more severe than previously thought, officials said on Thursday, forcing the government to forecast a deeper contraction of 8.5 percent to 9.5 percent for the year.
The Philippine economy, which before the pandemic was one of Asia's fastest growing, is likely to be far worse off this year than the previous forecast of a 5.5 percent decline, although a strong rebound for the next two years is expected.
--with a report from Reuters