MANILA – Headline inflation likely further eased in November due to higher base effects and lower global crude oil prices, an economist said on Friday.
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort told the Philippine News Agency that headline inflation is projected to further slow down to 4.3 percent this month from 4.9 percent in October.
In November last year, headline inflation was at 8 percent.
"Headline inflation could further ease year-on-year for the remaining months of 2023 and by early 2024, mathematically due to higher base effects and lower global crude oil prices to among four-month lows that led to rollbacks in local diesel and gasoline prices and help ease overall inflation," Ricafort said.
He said the strong peso will also help reduce import prices and help ease overall inflation.
Ricafort said the relatively better weather conditions since October 2023, except for some storm damage in some parts of Eastern Visayas due to the shear line, would also support more agricultural output and some easing of food prices.
He said, however, these are offset by some pick up in local and world rice prices partly due to some risk of the El Niño phenomenon that could reduce rice and other agricultural production.
Ricafort said other offsetting factors include the "seasonal increase in demand towards and in preparation for the Christmas holiday season that could seasonally lead to some pick up in prices of Noche Buena and other holiday products."
"Provided [there will be] no escalation of geopolitical risks particularly on the Israel-Hamas war and the potential effects on world oil prices and provided [there will be] no large storm damage that tends to increase food prices for the rest of 2023, headline inflation could ease further to a little over 4 percent from November to December for a 2023 average of about 6 percent," he said. (PNA)