By Joann Villanueva/PNA
MANILA — Economists of ANZ Research discount an adjustment in the Bangko Sentral ng Pilipinas’ (BSP) key policy rates on Thursday, after the government reported further deceleration of inflation rate to 4.4 percent last January.
In a report penned by Khoon Goh and Mustafa Arif, the research firm said month-on-month inflation rate posted an uptick of 0.2 percent because of higher food prices and the impact of domestic tax policy changes.
It, however, pointed out that year-on-year headline inflation slid from last December’s 5.1 percent and core inflation, which excludes volatile food and oil items, eased to 4.4 percent from the previous month’s 4.7 percent print.
It explained that slower core inflation “suggests that underlying pressures are easing” and this provides support to the central bank’s projection that inflation this year will be within the government’s 2 percent to 4 percent target band.
It noted that the central bank’s perspective slowdown of core inflation “is very encouraging” since the easing pressure is “consistent with some moderation in domestic demand.”
“Supported by a more balanced outlook for inflation, we expect the BSP to keep rates unchanged at its meeting on Thursday,” it added.
BSP’s policy-making Monetary Board (MB) hiked the central bank’s key policy rates by a total of 175 basis points last year, with the last 25 basis points increase decision done last November, due to elevated inflation rate.
Last year, domestic inflation peaked at 6.7 percent in September and October and has decelerated in the past three months.
— Economists of ANZ Research discount an adjustment in the Bangko Sentral ng Pilipinas’ (BSP) key policy rates on Thursday, after the government reported further deceleration of inflation rate to 4.4 percent last January.
In a report penned by Khoon Goh and Mustafa Arif, the research firm said month-on-month inflation rate posted an uptick of 0.2 percent because of higher food prices and the impact of domestic tax policy changes.
It, however, pointed out that year-on-year headline inflation slid from last December’s 5.1 percent and core inflation, which excludes volatile food and oil items, eased to 4.4 percent from the previous month’s 4.7 percent print.
It explained that slower core inflation “suggests that underlying pressures are easing” and this provides support to the central bank’s projection that inflation this year will be within the government’s 2 percent to 4 percent target band.
It noted that the central bank’s perspective slowdown of core inflation “is very encouraging” since the easing pressure is “consistent with some moderation in domestic demand.”
“Supported by a more balanced outlook for inflation, we expect the BSP to keep rates unchanged at its meeting on Thursday,” it added.
BSP’s policy-making Monetary Board (MB) hiked the central bank’s key policy rates by a total of 175 basis points last year, with the last 25 basis points increase decision done last November, due to elevated inflation rate.
Last year, domestic inflation peaked at 6.7 percent in September and October and has decelerated in the past three months.
