Special Report: Global Financial Crisis   

    MANILA, Dec. 5 (Xinhua) -- The Philippines' inflation rate fell in November to 9.9 percent from 11.2 percent in October as food and oil prices declined, the government said on Friday.

    For the past eleven months, headline inflation was at 9.4 percent, within government's target of curbing consumer price hike in a range between 9 percent and 11 percent, according to a statement released by the country's National Statistics Office.

    The November figure was lower than the Philippine central bank BSP's estimate of 10.3 percent to 11.2 percent for the month. Inflation a year ago was 3.2 percent.

    The statistics office attributed the decline to the lower prices of rice, vegetables and fuel.

    "The continued deceleration in the annual rates of the heavily weighted food, beverages and tobacco index together with those of the fuel, light and water and services resulted to the downtrend," according to the statement.

    "Compared to October, the country's consumer prices posted a negative rate in November as it fell by 0.6 percent. This was effected by the downward price adjustments in rice and vegetables and the series of price rollbacks in petroleum products," it added.

    Excluding selected food and energy items, core inflation in November picked up to 7.9 percent from 7.8 percent in October.

    Analysts say that the inflation decline may prompt the central bank to slash interest rates and support the growth of economy.

    "This is the third consecutive month of a negative CPI (Consumer Price Index). There's no more excuse for the BSP to keep rates steady on its next policy meeting on December 18," Victor Abola, the University of Asia and the Pacific's economist told local TV network GMA News.

    With anticipated weak demand from consumer worldwide due to the global recession, Abola said there was "no immediate danger" that consumer prices will rise by dizzying pace anytime soon.

    On Friday, BSP governor Amando Tetangco said inflation's return to the single-digit level grants Philippine monetary authorities further flexibility when they decide on their next policy move.

    "The November inflation of 9.9 percent is indeed a pleasant surprise as it provides greater monetary policy space," Tetangco told local reporters.

    The central bank has been keeping a neutral stance in the last two months as officials opted to continue observing inflationary pressures.

    The current borrowing rate is 6 percent, while the lending rate is 8 percent.

    Tetangco said the latest inflation data "should encourage lower market rates," which, in turn, should perk up economic activity.