THERE is no enough reason at the moment to tweak the current monetary policy stance as inflation will continue to be manageable and stabilize in the coming months, Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo said Friday.
“Right now, based on the March meeting of the Monetary Board, based on the 2012 base year, our [inflation] expectation is 3.8 percent for 2018 and around 3 percent by 2019,” Guinigundo said at the sidelines of the briefing on the first quarter inflation report held at the Bangko Sentral.
“So right now, we don’t have the numbers that will change our initial forecast as announced earlier by the Monetary Board. So the next meeting of the board next month, we should have more information that will help us refine our forecasts,” Guinigundo said.
He also downplayed the possibility that inflation would breach the 5-percent level or even inch closer to it, but declined to speculate on the possible peak of inflation this year.
“But if we see that the peak is 3.8 percent, and so far inflation averaged at 3.8 percent in the first quarter, you can just extrapolate what is going to happen for the rest of the year,” he said.
“Always remember that the inflation target of the BSP is not on a monthly basis. Always remember that the inflation time which we are committed to is on the whole year average for 2018, 2019. It is not based on one single observation of the monthly inflation. So we always look at the average for the entire year, let us say for 2018 and 2019,” he said.
Latest data showed headline inflation rose to 3.8 percent in the first quarter of 2018 from the quarter-ago level of 3 percent, using the new 2012-based consumer price index series.
The rate settled near the upper end of the target range of 2 percent to 4 percent for the year. Inflation pressures during the review quarter were traced mainly to higher price increases in selected food commodities, alcoholic beverages and tobacco products.
Meanwhile, using the 2006-based CPI series, headline inflation rose to 4.4 percent in the first quarter from 3.3 percent in the fourth quarter of 2017.
The policy-making Monetary Board of the Bangko Sentral at its meeting on March 22 decided to maintain the benchmark interest rates due to an expected manageable inflation environment going forward.
It kept the prevailing interest rates of 3 percent for overnight borrowing, 3.5 percent for overnight lending and 2.5 percent for deposit facilities.