MANILA- Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. on Tuesday said there is no need to change the central bank's monetary policy stance despite the faster inflation rate in February 2017.
Data released by the Philippine Statistics Authority (PSA) on Tuesday showed that rate of price increases in the second month this year went up to 3.3 percent from 2.7 percent last January.
This latest monthly rate is way higher than the 0.9 percent in February 2016 and brought the two-month average to three percent, in the middle of the government's two to four percent target for 2017 to 2020.
Core inflation, which excludes volatile items like food and oil, also registered a faster rate of 2.7 percent from month-ago's 2.5 percent bringing the average to date to 2.6 percent.
Citing the PSA report, Tetangco, in a text message to reporters, said faster annual increments in food and non-alcoholic beverages fueled the increase in domestic inflation rate.
"This puts the average for the first two months of the year right at the middle of the Government's target range, and confirms our expectations that the monthly path of inflation will move up, and that the average for the year will be within target," he said.
The BSP's policy-making Monetary Board (MB), during its meeting last Feb. 9, raised the central bank's inflation forecasts for 2017 and 2018 after noting the risks from oil price increases and weaker peso, among others.
Forecast for this year was revised to 3.5 percent from 3.3 percent last December while next year's projection was changed to 3.1 percent from three percent previously.
Tetangco, on the other hand, stressed that "as the uptick is in line with forecast, there appears to be no immediate impetus to adjust the stance of monetary policy."
"But we will remain data dependent in our assessment and forthcoming decisions," he said.
Tetangco said Philippine monetary officials will be "closely monitoring areas of possible price pressures, including petitions for utility and fare rate adjustments, the impact of the Malampaya shut down, the near-term impact of the CTRP (comprehensive tax reform program), as well market reactions to the Fed and its assessment of the US economy."
"On the downside, we are looking at the growth in the rest of the global economy, which continues to be tentative," he added.
Source: Philippines News Agency