BSP forecasts steadier inflation in January 2019

The BSP complex in Manila (File Photo
By Ramon FVelasquez/Wikimedia commons, CC BY-SA 3.0)

MANILA — Higher oil prices is seen to push January 2019 inflation between 4.3 to 5.1 percent.

In a statement Thursday, the Bangko Sentral ng Pilipinas (BSP) said higher domestic pump prices due to rising world crude prices and the implementation of the second increase in oil excise taxes “is seen to be the primary driver of inflation for the month.”

“In addition, higher fish and vegetable prices due to colder weather conditions and the annual adjustments in the excise taxes of alcoholic beverages from the Sin Tax Law could result in additional upward price pressures,” it said.

Monetary officials, meanwhile, projects these factors will be mitigated by lower prices of rice, cut in power rates, and strengthening of the peso.

“Looking ahead, the BSP will remain watchful of evolving inflationary conditions to ensure that the monetary policy stance remains consistent with the BSP’s price stability mandate,” the statement added.

Domestic inflation peaked at 6.7 percent in September and October 2018 and decelerated to 6 percent and 5.1 percent in the succeeding two months. This brought the year’s average to 5.2 percent.

Monetary officials project inflation to ease this year and return to the target band of 2 to four percent.

BSP forecasts inflation to average at 3.2 percent this year and 3 percent in 2020.