BSP sees manageable inflation for 2018 to 2019

MANILA, Philippines — The Bangko Sentral ng Pilipinas expects inflation to remain manageable over the policy horizon, with sanguine economic activity seen to help the consumer price index settle within the central bank’s target.

According to the Philippine Statistics Authority, headline inflation in December rose to 3.3 percent from a year ago — the same pace clocked in November and within the BSP’s 2.9-3.6 percent forecast.

Last month's figure brought the average for 2017 to 3.2 percent, which was within the central bank’s 3.0 percent ± 1.0 percentage point target range for 2016 to 2018.

READ: Inflation steadies in December

In a statement on Friday, BSP Governor Nestor Espenilla Jr. said inflation is projected to firm up above the midpoint of the target range for 2018 to 2019.

“Robust domestic economic activity, ample liquidity, and well-anchored inflation expectation continue to support within-target inflation,” Espenilla said.

“Looking ahead, the BSP will remain vigilant against any risks to the inflation outlook to ensure that monetary policy stance remains consistent with the mandate of maintaining price stability conducive to economic growth,” he added.

Last December 22, the Cabinet-level Development Budget Coordination Committee kept the inflation target for the period 2018 to 2020 at 2-4 percent.

In their last rate setting meeting in 2017, the BSP’s Monetary Board kept benchmark rates steady anew as inflation remains manageable.

The central bank also retained its inflation forecast of 3.4 percent for 2018, and 3.2 percent for 2019.

In a separate statement also on Friday, Socioeconomic Planning Secretary Ernesto Pernia said the government expects inflation over the near-term to remain stable despite potential price pressures by the tax reform law, weather patterns, and uncertainties in international oil markets.