Inflation likely to stay above 4% – BSP

The average inflation rate for this year will exceed four percent and breaking the government target, based on data and trends that the Bangko Sentral ng Pilipinas (BSP) keeps track of for the 2018 path.

“The BSP expects inflation, using the 2006-based CPI (consumer price index) series, to average slightly above four percent in 2018,” according to BSP Governor Nestor A. Espenilla Jr.

Espenilla has already stated that despite breaking the target, inflation will not top five percent for this year and that average inflation “is expected to return to within target range in 2019, settling slightly above the midpoint of the same target range.”

The BSP looks to maintain an above four percent inflation forecast for the rest of the year which it will confirm on March 22 during its second monetary policy meeting. It will keep the high-end of the official government target of two percent to four percent as forecast.

During its last key rates’ decision meeting, the Monetary Board announced an average inflation forecast of 4.3 percent for 2018 and 3.5 percent next year.

For the first two months of the year, inflation has averaged 4.2 percent (2006-based) with January’s four percent and February’s 4.5 percent, still using the old base year which is the benchmark against prevailing prices. Using the rebased 2012 series, inflation stood at 3.9 percent for February.

Espenilla said that the results of the BSP’s latest survey of private sector economists “showed steady mean inflation forecasts for 2018 and 2019 relative to the results in December 2017.”