The Bangko Sentral ng Pilipinas (BSP) on Tuesday vowed to keep policy settings “sufficiently tight” despite another deceleration of inflation rate last month, noting that risks continue to lean on the upside.

The rate of price increases slowed for the second consecutive month in November to 4.1 percent from month-ago’s 4.9 percent, which the Philippine Statistics Authority (PSA) traced to slower annual upticks in the prices of the heavily-weighted food index.

In a statement, the BSP said the November inflation rate is within the central bank’s 4 percent to 4.8 percent forecast for the month.

“The latest inflation outturn is consistent with the BSP’s projections that inflation will likely moderate over the near term due to easing supply-side price pressures and negative base effects,” it said.

Last month’s inflation rate is lower than year-ago’s 8 percent and brought the 11-month average to 6.3 percent.

Monetary authorities remain confident that inflation will return to within the government’s 2 percent to 4 percent target range next year.

The BSP said “risks to the inflation outlook still leans significantly towards the upside” due to possible effects of higher transport fares and power rates, as well as the upticks in oil prices in the international market and higher-than-expected hike in minimum wage in areas outside the National Capital Region.

However, it said these factors are expected to be countered by the effects of the weaker-than-expected recovery of the global economy and the government measures to cushion the impact of the El Niño phenomenon on the agriculture sector, among others.

“Looking ahead, the Monetary Board deems it necessary to keep monetary policy settings sufficiently tight until a sustained downtrend in inflation becomes evident. The BSP will continue to monitor inflation expectations and second-round effects and take appropriate action as needed to bring inflation back to the target, in keeping with the BSP’s price stability mandate,” it added. (PNA)