Espenilla keeps brave face amid inflation spiral under his watch
The Philippines’ inflation rate rose to multiyear high of 5.7 percent but Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla Jr. said this was expected as he expressed optimism that it would go back to within-target levels in 2019.
Inflation in the seventh month this year is at the upper end of the BSP’s forecast range of 5.1-5.8 percent.
Espenilla, in a message to reporters, pointed out that this “remains consistent with our expectation of elevated inflation prevailing in 2018 that will return to the target range by 2019.
“We will consider all the latest data updates in determining the strength of our follow-through response in the upcoming policy meeting of the MB this Thursday,” he said referring to the rate setting meet of the central bank’s Monetary Board (MB).
“I reiterate the BSP’s firm commitment to meet the inflation target of 2-4 percent,” he added.
The Philippine Statistics Authority (PSA) on Tuesday reported that the uptick in the rate of prices from month-ago’s 5.2 percent was due to faster inflation of the food and non-alcoholic beverages index.
Inflation in the same month last year is lower at 2.4 percent while average inflation to date stood at 4.5 percent, higher than the government’s 2 to 4 percent target until 2020.
Excluding some volatile food and oil items, core inflation rose to 4.5 percent from the previous month’s 4.3 percent. Average to date is 3.5 percent.
Earlier, Espenilla said the Board was considering to increase the central bank’s key rates to further address any secondary effects of the rising inflation rate.
To date, the MB raised the central bank’s key rates by a total of 50 basis points, bringing the rate of the overnight reverse repurchase (RRP) facility, among others, to 3.5 percent. (PNA)