Bangko Sentral ng Pilipinas (BSP) sees inflation for 2013 and 2014 settling at the lower half of the government-set target range of 3 percent to 5 percent.
BSP Governor Amando Tetangco Jr. said in a text message on Monday that, "The latest forecasts suggest that average inflation for 2013 and 2014 would settle at the lower half of the government-set target range of 3 [percent] to 5 percent, reflecting continued manageable inflation pressures and well-anchored inflation expectations."
On Thursday, Tetangco said during the Monetary Board (MB) policy meeting that the board's decision is based on its assessment that the inflation environment remains manageable. The latest baseline forecasts continue to track the lower half of the 3-percent to 5-percent target range for 2013 and 2014, while inflation expectations also remain firmly anchored.
He said that risks to the inflation outlook also appear to be evenly balanced around the baseline forecasts, with inflation expectations are broadly aligned with the inflation target range.
"For January, the BSP projects inflation to fall between 2.5 percent to 3.4 percent. This projection incorporates the impact of the Sin Tax Reform Act of 2012 as well as adjustments in electricity and water rates," Tetangco said.
However, the upside pressures on inflation could be reduced by lower food prices particularly vegetables, lower oil prices, and appreciation of the peso against the US dollar, he said.
"Moving forward, the BSP will continue to monitor price developments to ensure that the monetary policy stance remains consistent with the mandate of preserving price stability conducive to sustained economic growth," Tetangco added.
Distributed by MCT Information Services
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