Inflation seen at over 3% amid rallying peso
Inflation likely stayed above 3 percent in April despite the recent spurt of strength from the peso, Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said.
“The BSP forecast suggests that April inflation could settle within the 3-3.8 percent range,” Tetangco said in a text message to reporters Wednesday night.
“Upward adjustments in electricity and water rates as well as higher domestic fuel prices could be partially offset by lower LPG prices and the stronger peso,” Tetangco added.
After sliding to an over 10-year low level of 50.1:$1 in mid-February, the peso returned to the 49:$1 level starting April 10.
Headline inflation rose 3.4 percent year-on-year in March, the fastest rate of increase in prices of basic goods in 28 months.
Inflation averaged 3.1 percent in the first quarter, a little past the midpoint of the government’s 2-4 percent target range for 2017.
To compare, the average inflation rate during the past two years was below 2 percent.
The BSP expects further monthly inflation upticks until the third quarter.
The Monetary Board, the BSP’s highest policymaking body, sees headline inflation averaging 3.4 percent by yearend from 3.5 percent previously, while the 2018 forecast was also slightly cut to 3 percent from 3.1 percent.
Economists polled by the BSP in March also raised their inflation forecasts for this year to an average of 3.4 percent from 3 percent previously on the back of the peso’s performance during the first quarter and the impact of higher oil prices.
