Monetary Board Hikes Inflation Forecasts for 2015, 2016

The central bank’s policy-making Monetary Board (MB) on Thursday revised upwards its inflation forecasts for this and next year due partly to the impact of the El Niño phenomenon on agriculture and power.

In a briefing, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa Guinigundo said the Board upped its inflation forecast for this year to 2.3 percent from 2.2 percent last March.

Also, the 2016 figure was hiked to 2.6 percent from 2.5 percent previously .

Guinigundo said the Board continued to see that inflation would be at the lower half of the government’s two to four percent inflation target for this year until 2018 because of lower electricity rates in Luzon and the delay in the hike of Philippine National Railway’s (PNR) fare.

He, however, said that weak peso, higher oil prices and the impact of El Niño were upside risks, thus, the hike in their inflation forecast.

He said the dry spell was expected to be experienced until the end of this year and could negatively impact on power and agriculture.

In the first four months of the year, inflation averaged at 2.3 percent.

The April level decelerated to 2.2 percent from months-ago’s 2.4 percent. (PNA) RMA/JS/EDS