Another Monetary Easing Looms; as Bangko Sentral Lowers Inflation Target

Article excerpt


Another monetary easing looms as Bangko Sentral ng Pilipinas (BSP) yesterday reduced its inflation rate target for the year by a 0.5 percentage point to a range of 4.5 to 5 percent, from the original assumption of 5 to 6 percent.

BSP Governor Rafael B. Buenaventura said the BSP's lower inflation rate target was based on the monetary authorities' assessment that prices of basic commodities will remain stable.

The revision was adopted amidst reports that oil companies are planning to jackup the prices of oil and other petroleum products within the next few weeks due to the uptick in the prices of crude oil in the international market.

"This is not yet final but based on our evaluation so far, we believe that inflation would average at a lower rate of 4.5 percent to 5.5 percent. We will recommend a revision of the target to the DBCC (Development Budget Coordination Council)," Buenaventura said.

The inter-agency DBCC, meanwhile, said discussion on the inflation rate target revision has yet to be put in the agenda next month, at the earliest, or April, at the latest.

National Economic and Development Authority Deputy Director General Gilbert Llanto said DBCC will decide in March or in April, the revision which would include other macroeconomic targets such as the projected growth in gross domestic product. …