Economist Eyes Philippine February Inflation At 2%

Rate of price increases is seen to be on an uptrend this 2016 although an economist of ING Bank Manila sees a moderate growth for February at about 2 percent.

The Philippine Statistics Authority (PSA) is scheduled to release the February 2016 inflation report on Friday, March 4.

In a research note, ING Bank Manila senior economist Joey Cuyegkeng said the 2 percent average is also his forecast for the full-year figure, which in turn is the lower end of the government’s 2 to 4 percent target until 2018.

Last January, inflation decelerated to 1.3 percent from month-ago’s 1.5 percent due to the decline in the rate of price increases on housing, water, electricity, gas and other fuels, and transport, among others.

The Bangko Sentral ng Pilipinas (BSP) forecasts February 2016 inflation to stay within 0.9-1.7 percent.

Cuyegkeng said that amidst the risks from El Nino, gradual recovery of oil prices and possible improvement in the Chinese economy later this year, inflation, which is seen to post faster rate in the second half of the year until next year, is not seen to surpass the government’s target band.

He forecasts inflation to average closer to the upper end of the government’s target in 2017.

With inflation seen to go up to within-target levels in the second half of this year, the economist said they would be on the look-out for a possible “pre-emptive policy tightening” in the central bank’s policy rates “to ensure that inflation and its expectations remain within the inflation target range in 2017.”

“We expect BSP monetary policy to turn more hawkish later this year to ensure inflation remain within expected levels,” he added. (PNA) JBP/JSV