Inflation likely stayed below the central bank’s target range for the sixth consecutive month due to the lower price of gasoline and stable food prices.
Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. on Friday said inflation may have settled between 1.9 and 2.8 percent in September, after hitting a four-year low of 2.1 percent in August.
“Prices of premium gasoline declined while prices of vegetables and fish stabilized after the monsoon rains,” Tetangco told reporters.
“However, price increases in rice, selected oil products, and electricity rates were noted during the month,” he added.
If inflation falls within the forecast range, this would mark the sixth straight month that the rate of price increases would be below 3 percent, which is the low end of the BSP’s target of 3 to 5 percent this year. The inflation rate was last above 3 percent in March at 3.2 percent.
Benign inflation pressures give the BSP’s Monetary Board space to keep interest rates at record lows to support the country’s growing economy.
“The BSP will continue to closely monitor the developments that shape the outlook in prices and economic activity to ensure that monetary policy is directed at safeguarding price stability in an environment of sustained economic growth,” Tetangco said.
The central bank’s benchmark overnight borrowing and lending rates currently stand at record lows of 3.5 percent and 5.5 percent.
The Philippine economy was the fastest growing Southeast Asian market in the first half of the year after expanding by 7.6 percent.
If sustained throughout the year, the country would beat the government’s own growth forecast of 6 to 7 percent for 2013.
The likely low inflation for September comes despite the 30-percent increase in the amount of money circulating in the economy in July following restrictions on the use of individual investors of the central bank’s Special Deposit Accounts (SDA).