MANILA -- Higher domestic oil prices as well as higher electricity rates are seen as the primary drivers of inflation in February 2019, which the Bangko Sentral ng Pilipinas (BSP) forecasts to range between 3.7-4.5 percent.
In a statement Thursday, the BSP said its Department of Economic Research (DER) considers the lower prices of rice and other agricultural products, boosted by the strengthening of the peso and adequate supply of rice due to importation and the harvest season, as the factors that most likely mitigated price pressures, however.
“Looking ahead, the BSP will continue to be watchful of evolving price trends to ensure that the monetary policy stance remains appropriate to maintaining price stability that is conducive to a balanced and sustainable growth of the economy and employment,” it added.
Rate of price increases in the country has decelerated after peaking at 6.7 percent in September and October 2018.
The inflation upticks during most of last year was due to supply issues on rice and other agricultural products.
With the elevated inflation rate, the BSP’s policy-making Monetary Board (MB) increased the central bank’s key policy rates by 175 basis points to ensure that inflation expectations are contained.
Also, the government has implemented non-monetary measures such as the release of rice stocks in all National Food Authority (NFA) warehouses.
Last January, inflation declined to 4.4 percent from the previous month’s 5.1 percent.
Monetary officials expect inflation to go back to within the two to four percent target starting in the first quarter of this year. (PNA)
