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WHILE
core inflation, which reflects the long view on prices,
kicked up to 4.8 percent year-on-year in March from 4
percent in February, rising inflation is not a big
threat and domestic prices would remain within target,
the Bangko Sentral ng Pilipinas (BSP) said Friday.
Core inflation removes specific food and
energy related items from the consumer price index, or
the theoretical basket of services and goods Filipinos
typically purchase.
BSP managing director Ma. Cyd Tuano-Amador
said the sharp increase in inflation in March to 6.4
percent from 5.4 percent was the result of a confluence
of factors, including the low inflation base last year,
the stronger economy and higher food prices.
She sought to comfort Filipinos, saying
“higher inflation is not unique to the Philippines.
Countries like Vietnam, which has 19 percent, and China,
which has 9 percent,
are also grappling with inflation worries.”
She noted the Philippines remains a
labor-surplus economy that has, thus far, not given in
to demand-pull inflation pressures such as wage
increases and the like.
She also said the BSP had taken steps to
ensure against unwarranted rises in peso liquidity
growth: “We’re not feeding into that.”
Amador said the Monetary Board was
“digesting all these developments” and may be expected
to announce a suitable course of action at its next
meeting later this month.
Analysts have said current monetary policy
settings remain appropriate with the country’s growth
goal at this point, no matter that the international
price of crude oil and agricultural products remain
elevated over the short haul.
Previously, BSP Governor Amando Tetangco
said the relative firmness of the exchange rate
continues to provide a cushion against imported oil and
food prices rising much more in the domestic market.
“The consensus view of a prolonged US
slowdown and the resulting weaker outlook for global
economic growth may also reduce demand pressures, and
therefore moderate price increases in global oil and
nonoil commodities,” said Tetangco.
Should
oil prices continue to surge ahead, the planned oil
tariff rate cut should also help alleviate inflationary
pressures, Tetangco said. |
