Philippines: Inflation targets still ‘doable’: BSP – 10 Sep 2017

  • The Bangko Sentral ng Pilipinas (BSP) said the latest inflation forecasts set by the Monetary Board are still ‘doable’ even as the consumer price index in Aug 17 quickened to its fastest pace in three months.
  • BSP officer-in-charge Diwa Guinigundo said the inflation forecasts set by the Monetary Board at the rate setting meeting last 10 Aug 17 are still ‘doable’ despite the rise in inflation to 3.1% in Aug 17 from 2.8% in Jul 17.
  • “We expected this blip and we remain optimistic that the latest inflation forecasts as considered in the last meeting of the Monetary Board continue to be doable at 3.2% in 2017 and 2018, tapering off to 3.1% in 2019,” he said.
  • This brought the average inflation to 3.1% from Jan- Aug 17, well within the 2-4% target set by the BSP for 2017 to 2020.
  • The benign inflation environment and robust domestic demand have allowed the BSP to keep its policy stance unchanged since Sep 14 when it raised interest rates by 25 basis points.
  • The slightly higher Aug 17 headline inflation was driven mainly by higher prices of non-food commodities, particularly upward adjustments in electricity rates due to the increase in generation and transmission charges, higher prices of domestic petroleum products, and increase in air passenger and sea fares.
  • “The overall inflation situation will be comprehensively reviewed by the Monetary Board on 21 Sep 17 in accordance with the regular policy review schedule,” he said.
  • The BSP chief said the inflation path would be supported by favorable outlook for domestic economic activity with appropriate liquidity conditions and well-anchored inflation expectations.

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