The Market Monitor Minding the Nation's Business
Bangko Sentral ng Pilipinas’ (BSP) policy-making Monetary Board (MB) maintained its 2017-18 inflation projection but slightly hiked the 2019 figure given the developments in oil prices and weakness of the peso, among others.
In a briefing, BSP Deputy Governor Diwa Guinigundo said the 2017 to 2018 forecasts remain at 3.2 percent while the 2019 projection was increased to 3.2 percent from 3.1 percent last August.
Four factors were identified namely the depreciation of the peso, possible increase in oil prices due to the impact of Hurricane Harvey, production outages in Libya and possible extension of production cut by members of the Organization of the Petroleum Exporting Countries (OPEC) beyond March 2018.
Also, the robust growth of domestic liquidity, which continues to be boosted by domestic demand, and the P21 adjustment of minimum wage of workers in Metro Manila from P491 to P512 effective end-September this year.
“We need to consider that for the forecast of inflation for the next three years,” Guinigundo said.
The BSP official explained that monetary officials will also consider the continued growth story of the domestic economy for the monthly inflation path in the second half of the year.