BSP pegs April inflation at 2.7%-3.5%
MANILA, Philippines — The Bangko Sentral ng Pilipinas on Tuesday said it expects another month of benign inflation in April on the back of falling rice prices and a stronger peso that likely cushioned the impact of high local pump prices and power rates.
In a statement, the BSP’s Department of Economic Research pegged April inflation at the 2.7%-3.5% range.
“Higher domestic oil prices and the slight upward adjustment in electricity rates are seen to provide upside price pressures for the month,” the central bank unit said.
“However, these pressures may be partially offset by the continued decline in rice prices and by the peso appreciation,” it added.
“Moving forward, the BSP will continue to closely monitor evolving price trends and will undertake necessary measures towards its commitment to price stability.”
Data from the Philippine Statistics Authority showed inflation decelerated to 3.3% in March, slower than 3.8% chalked up in February and 4.3% posted a year ago.
The latest reading — which marked the fifth straight month that soaring prices cooled down — was the lowest inflation rate since January 2018, the PSA said.
Year-to-date, inflation averaged 3.8% — settling within the state’s 2%-4% annual target.
In a commentary sent to reporters also on Tuesday, ING Bank said if the BSP’s projection for April is realized, it would mark the third month in a row that inflation is back within the central bank's target.
It added that given BSP Governor Benjamin Diokno's recent remarks hinting at a cut in interest rates and reserve requirement within the year, the central bank is finally getting closer to reversing its previous “ultra-aggressive stance.”
“BSP has vowed to remain data-dependent in its actions and will have three months’ worth of within-target inflation prints to consider,” said Nicholas Mapa, senior economist at ING Bank in Manila.
“Furthermore, given the forward-looking nature of inflation targeting, inflation expectations and forecasts both point to inflation remaining within target for the next two years,” Mapa added.
The PSA will release the official April inflation data on May 7. — Ian Nicolas Cigaral
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