BSP sees faster Feb inflation of 2.3%–3.1%
Consumer prices may have risen at a faster clip in February, driven by higher costs of certain food staples and more expensive oil and electricity, the Bangko Sentral ng Pilipinas (BSP) said.
In a statement on Friday, the BSP said inflation may have settled between 2.3 percent and 3.1 percent this month—which would mark a quicker pace of price gains than January’s 2-percent clip.
Even at that faster pace, the outlook suggested that the figure to be reported on March 5 may have stayed within the 2- to 4-percent target range of the central bank.
“Upward price pressures could stem from higher prices of rice and fish, elevated domestic petroleum prices and increased electricity charges in Meralco-serviced areas,” the BSP said.
“These pressures, however, may be partly offset by lower prices of vegetables, fruits and meat, as well as peso appreciation,” it added.
Stable prices
Looking ahead, the BSP expects inflation to average 3.6 percent this year and 3.2 percent next year, suggesting that consumer prices are likely to remain stable and on target, with any supply shocks seen as temporary.
That, in turn, could give the BSP enough scope to further lower borrowing costs to support the anemic economy if warranted. BSP Gov. Eli Remolona Jr. acknowledged that policymakers had underestimated the economic damage caused by the high-profile graft scandal, which has paralyzed public spending and gutted confidence.
The BSP has lowered its key rate to an over three-year low of 4.25 percent, though it acknowledged that its capacity to support the sluggish economy may be reaching its limits. Remolona has said further monetary easing may have a limited effect at this point unless matched by stronger government spending and credible anticorruption measures.
Going forward, additional easing actions would be “conditional,” the BSP chief said.
“The BSP will continue to monitor domestic and international developments to ensure that its policy settings remain consistent with the pursuit of price stability conducive with sustainable growth and employment,” the central bank said.
