Inflation seen to stay within gov’t target

MANILA, Philippines - Inflation is expected to remain within the government’s two to four percent target this year, local businesses said in a survey.

“Businesses expected that the rate of increase in commodity prices is likely to remain low and within the two to four percent target range in 2015,” the Bangko Sentral ng Pilipinas said.

The latest Business Expectations Survey showed that respondents expect inflation to fall this quarter although firms see it picking up in the second quarter. A 3.9-percent average for both quarters has been forecast by the survey respondents.

“This is consistent with inflation expectations based on the results of the January 2015 BSP’s survey of private sector economists which yielded lower mean inflation forecasts for 2015, supporting the assessment of within-target inflation outlook,” the central bank said.

“Similarly, results of the January 2015 Consensus Economics inflation forecast survey for the country showed lower inflation forecasts for 2015,” the BSP said.

The BSP in January said economists it surveyed have forecast the rate to average 3.6 percent this year, down from their previous estimate of four percent.

Consensus Economics, meanwhile, also expects the rate to average 3.6 percent this year, also lower than its previous forecast of 3.9 percent.

Inflation slowed to an 18-month low of 2.4 percent in January due to lower utility and oil prices.

The central bank last month kept key policy rates steady as inflation expectations fell within the two to four percent target ranges for 2015 and 2016.