THE country’s inflation rate in April is still likely above the government’s annual target range for the year, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said.
In a message to reporters on Friday, Diokno said the country’s inflation likely settled between 4.2 percent and 5 percent in April this year based on the Central Bank’s forecasting models.
“Lower prices of domestic petroleum products and key food items, such as fruits and vegetables due to improved supply conditions are the main sources of downside pressures during the month,” Diokno said.
“However, these could be partly offset by upward adjustment in Meralco electricity rates, coupled with higher prices of pork, fish, and rice,” he added.
In March, inflation eased to 4.5 percent from the 4.7-percent inflation rate in February.
In a separate commentary, Security Bank chief economist Robert Dan Roces said their estimated inflation rate for April is at 4.7 percent.
“We factored in a slight uptick in food prices with meat costs up; pork price caps have expired while the executive order [EO 128] reduced tariffs on pork imports only recently kicking in. Fish remain steady, while vegetables and fruits continue their deceleration,” Roces said.
“The transport basket inflation may have accelerated due to private fuel costs while transport fares remain elevated due to the one-off development of banning more than 1 passenger for tricycles. The Manila Electric Company [Meralco] also implemented a slight rate hike as generation charges went up,” it added.
In their March monetary policy meeting, the BSP said the Philippines annual average inflation will likely shoot above the government’s 2- to 4-percent target range to hit 4.2 percent.
“Moving forward, the BSP will continue to monitor evolving economic and financial conditions to ensure that the monetary policy stance remains consistent with the BSP’s price stability mandate,” Diokno said.
Roces said they expect the BSP to keep rates steady for the next meeting as it views inflation this year to be transitory and also to bolster the economic recovery.
“BSP will only consider monetary policy actions should second-round effects such wage effects and inflation expectations become unreasonable,” Roces said.
The BSP is expected to hold its next monetary policy meeting on May 13. This will be the BSP’s third monetary policy meeting for the year.
Read full article on BusinessMirror
