Consumer prices are expected to remain stable this year and the next, despite the weak global conditions that continue to upset local financial markets.
The Bangko Sentral ng Pilipinas (BSP) said inflation for the year would likely average near the low-end of the Monetary Board’s 3 to 5 percent 2013 target range. By next year, inflation may also fall below the midpoint of the same target range.
“There could be some increase but, on the whole, we’ll still be well within the target,” BSP Gov. Amando M. Tetangco Jr. told reporters on Wednesday. “In fact for 2013 … we’re slightly below the target at this point.”
In the nine months to September, inflation averaged 2.8 percent. In September alone, the rate of rise in consumer prices accelerated to 2.7 percent from 2.1 percent the month before.
Data from the NSO showed that the following commodity groups registered a faster rate of rise in September compared with August: food and non-alcoholic beverages; alcoholic beverages and tobacco; housing, water, electricity, gas and other fuels, and health.
Inflation for food alone accelerated from 1.8 to 2.5 percent month on month.
“Even if there is some increase, [it is likely] that we’ll be closer to the lower end of the target range,” Tetangco said. “The estimate is that inflation for 2014 will be below the midpoint of the target range.”
With inflation seen to remain stable, the regulator may retain monetary policies that support economic growth. The BSP’s benchmark overnight borrowing and lending rates are currently at record lows of 3.5 and 5.5 percent, respectively. Yields on special deposit accounts also stand at 2 percent across all maturities.
Tetangco earlier said the BSP would likely keep the current policy rates until the end of the year.