Bangko Sentral ng Pilipinas will assess the impact of the agricultural damage caused by typhoon Lando on consumer prices.
Bangko Sentral Governor Amando Tetangco Jr. said the bank expected to receive a report soon from the Agriculture Department about the extent of the damage on agricultural sector.
“We have not [yet] received the assessment from the Department of Agriculture. Once we get that assessment, we will estimate the potential impact [to inflation],” Tetangco said at the Philippine International Convention Center in Pasay City Wednesday evening.
“But you know, inflation is very low, [only] 0.4 percent [ in September). So in terms of the target, it is not an issue,” Tetangco said.
The National Disaster Risk Reduction and Management Council said that typhoon Lando’s damage to agriculture was estimated at P5.3 billion while damage to infrastructure reached P520,000. The agency said these figures were expected to increase in the coming days.
Inflation in September further slowed down to 0.4 percent from 0.6 percent in August. It was also significantly slower than the 4.4 percent during the same month last year.
This brought the first nine months’ average to 1.6 percent, way below the government’s official target of 2 percent to 4 percent for 2015. The downtrend was primarily due to the annual declines in the indices of housing, water, electricity, gas and other fuels and transport.
Tetangco said there was a need to recalculate the inflation path to see how it was “affected by the recent developments, particularly on oil prices [which slightly recovered] and the impact of the latest natural calamities.”
“But we are right now below the target range, [actually below] the lower bound of the target range of 2.6 percent for 2016 and 3 percent for 2017,” Tetangco said.
The Monetary Board, the policy-making body of the Bangko Sentral, on Sept. 24 kept the benchmark interest rates steady at 4 percent for overnight borrowing and 6 percent for overnight lending, the eighth time since October last year.
The board also reduced the inflation average forecast for 2015 to 1.6 percent from the previous estimate of 1.8 percent.