BSP confident inflation to remain within goal

The Bangko Sentral ng Pilipinas (BSP) is confident of within-target inflation in the near term after the December 2017 inflation was steady at 3.3 percent, bringing the average rate this year to 3.2 percent.

Data released by the Philippine Statistics Authority (PSA) showed that core inflation, which excludes volatile items food and oil, slowed to 3 percent from last November’s 3.3 percent.

The average inflation last year is in line with the central bank’s average inflation projection for the year. BSP Gov. Nestor Espenilla Jr. thus targets rate of price increases “to remain manageable over the policy horizon”.

The government has set an inflation target range of between 2 percent and 4 percent for 2017 to 2019.

Espenilla, in a statement sent to journalists, said monetary officials project inflation “to settle above the midpoint of the target range for 2018 to 2019”.

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

BSP policy-making Monetary Board’s (MB) average inflation forecast for 2018 is 3.4 percent, up from last year due to transitory impact of the tax reform program on some commodities, while it is 3.2 percent for 2019.

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