THE Bangko Sentral ng Pilipinas (BSP) is looking to bring down its current inflation forecasts, after seeing “definite signs” of a slowdown in the rise of consumer prices in the policy horizon.
“Our latest forecast for full-year 2018 average inflation is 4.6 percent. This is higher than the 2 to 4 percent target range. However, for 2019, we expect inflation to moderate and settle at around 3.4 percent. It is possible we will revise downwards with more data becoming available,” BSP Governor Nestor Espenilla Jr. said in in the Philippine Economic Briefing held in Tokyo on Tuesday.
These estimates were announced in their most recent monetary policy meeting on May 10, where the BSP raised its main policy rate by 25 basis points to curb inflationary pressures.
Espenilla, in his speech in Tokyo, reiterated the BSP’s commitment to bring inflation back to the 2 to 4 percent target range, citing readiness to move their rates for the second time this year should the latest data warrant another hike.
“The BSP remains strongly committed to maintaining a favorable inflation environment and we stand ready to timely adjust our policy settings to achieve our inflation target,” the governor said.
“On May 10, 2018, the BSP raised its policy rates by 25 basis points for the first time since 2014, to temper any build-up in inflation expectations and help arrest potential second-round effects. We stand ready to adjust further as may be necessary to keep inflation expectations well anchored,” he added.
Latest data show inflation hitting 4.6 percent in May this year. This brought the average inflation to 4.1 percent in the first five months of the year.
The BSP will hold its monetary policy setting meeting anew on Wednesday, June 20. This will be the fourth policy meeting for the year.
The BSP is also expected to announce new inflation forecasts for this year and the next in the post-monetary policy meeting briefing.