COMPETING price pressures in April were seen to limit inflation for the month within a narrow band ranging from a low of 0.7 percent to no more than 1.5 percent, the Bangko Sentral ng Pilipinas (BSP) said on Thursday.
BSP Governor Amando M. Tetangco Jr. said while there is “upward pressure” acting on particular items helping push prices higher, such are not as compelling enough to push the inflation rate beyond the indicated upper end of the price spectrum.
“The increase in domestic oil prices, as well as in power and water rates, pose inflation pressures during the month. Going forward, the BSP will continue to monitor possible price pressures to ensure price stability conducive to balanced and sustainable economic growth,” Tetangco told reporters on Thursday.
Inflation in March averaged only 1.1 percent and represented an acceleration from 0.9 percent in February that allowed the three-month inflation rate to average also at 1.1 percent. This falls below the target band for the year ranging from 2 percent to 4 percent.
The forecast rate for April betrays a near-horizon inflation path generally trending lower, unlike last year when the four-month inflation rate averaged higher at 2.2 percent.
The BSP previously hinted at keeping its current policy stance frozen where they are at the moment given domestic price developments as well as in the global economy, including monetary policy decisions in the US which remain the country’s most important trading partner.
On Thursday the US Federal Reserve (the Fed) kept its policy rates unchanged for the moment although its language has been clear that its next move would be a rate hike.
“The Fed action of keeping rates on hold was broadly in line with expectation. The market will, however, continue to monitor changes in nuances and the balance of risk assessment from the Fed,” Tetangco said.
Also on Thursday, the Bank of Japan ruled out any more monetary-stimulus program by discontinuing its asset-purchase program meant to quicken the pace of economic expansion and approximate the target inflation averaging 2 percent.
Tetangco said the development in the Fed should help “clear up global market positioning in the very near term.” “For our local markets we await the conduct of our national elections, although we don’t foresee significant changes in economic policy thrusts. At the moment, we really don’t expect any major developments cropping up that would necessitate a shift in our stance of policy,” Tetangco said.