April inflation seen within 0.7-1.5% range

Inflation likely settled within the 0.7-1.5 percent range in April amid hikes in utility rates, Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said Thursday.

The BSP chief also said monetary policy settings remained appropriate, with next month’s elections seen a mere blip as far as economic policies were concerned.

“Increases in domestic oil prices as well as in power and water rates pose inflation pressures during the month,” Tetangco said in a text message to reporters.

The rate of increase in prices of basic commodities rose 1.1 percent year-on-year in April, up from 0.9 percent in February, although slower than the 2.4 percent posted a year ago.

At the end of April, headline inflation averaged 1.1 percent, below the 2 to 4 percent target for 2016 and less than half the average of 2.4 percent during the first quarter of last year.

Separately, Tetangco said the US Federal Reserve’s action keeping rates on hold on Thursday morning in Manila “was broadly in line with expectation.”

“The market will, however, continue to monitor changes in nuances and the balance of risk assessment from the Fed,” he said.

“There is still the Bank of Japan meeting and the market is awaiting the announcement. That should help clear up global market positioning in the very near term,” he added.

On the domestic front, “we await the conduct of our national elections, although we don’t foresee significant changes in economic policy thrusts,” Tetangco said.

“At the moment, we really don’t expect any major developments cropping up that would necessitate a shift in our stance of policy,” according to Tetangco.