BSP eyes March ’15 inflation range within 2.1-2.9%

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MANILA — The country’s inflation rate is seen to stay within the 2.1-2.9 percent range in March 2015.

In a text message to reporters Wednesday, Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said lower electricity rates, drop in fuel prices and taxi fare and sustained decline in rice prices are the main factors in the projected slower inflation rate.

He said lesser price pressures from these commodities and services “indicate downside inflation pressures for March.”

”Going forward, the BSP will continue to monitor developments that could affect inflation in line with the BSP’s commitment to price stability conducive to a balanced and sustained economic growth,” he added.

The Land Transportation Franchising and Regulatory Board (LTFRB) implemented a PhP10 nationwide cut in taxi cabs’ flag down rate effective March 9, 2015.

Also, power rates of the Manila Electric Company (Meralco), the country’s largest distribution utility (DU), declined this month after prices of electricity it sourced from its suppliers also went down.

Inflation in the first two months of 2015 averaged at 2.5 percent.

Last February, the rate of price increases slightly went up to 2.5 percent from the previous month’s 2.4 percent, making analysts forecast that domestic inflation has bottomed out.

Monetary officials, however, are confident that inflation will be manageable in the medium term.

During the last policy meeting of the BSP’s policy-making Monetary Board (MB) last February, it cut the central bank’s inflation projection for this and next year due to effects of lower oil prices, stronger peso and lower-than-expected global expansion.

The average inflation forecast for this year was cut to 2.3 percent from 3.0 percent previously while next year’s projection is now at 2.5 percent from 2.6 percent.