MANILA — Moody’s Analytics projects a further increase of 25 basis points in the Bangko Sentral ng Pilipinas’ (BSP) key policy rates before the end of 2018.
In a publication issued Friday, the research firm said the additional increase in the central bank’s key rates is projected “to tame inflation, which is hovering near 7 percent year on year, due to a combination of the weak peso, high oil prices, and earlier adverse weather, disrupting fresh produce supplies.”
To date, BSP’s policy-making Monetary Board (MB) has increased the central bank’s key rates by a total of 150 basis points to help rein in inflation and ensure price stability.
In the first nine months of the year, the rate of price increases averaged 5 percent, higher than the government’s 2 percent to 4 percent target band for 2018-2020.
Last September alone, inflation rose to a multiyear high of 6.7 percent due to faster increases of the heavily-weighted food and non-alcoholic beverages index.
This situation has led the inter-agency Development Budget Coordination Committee (DBCC) to adjust the inflation assumption for this year from a range of 4 percent to 4.5 percent to 4.8 percent to 5.2 percent.
Authorities, however, said that inflation is seen to go back to within target levels of 2 percent to 4 percent in 2019 with the help of monetary policy decisions, as well as measures identified to address supply issues.
Malacañang has issued a memo directing several government agencies to ensure an adequate supply of rice, vegetables, meat and fish.
Among these issuances is Administrative Order (AO) No. 13, which removes non-tariff barriers and streamlines administrative procedures on the import of basic agricultural commodities.
Also, Memorandum Order (MO) No. 26 was issued directing the Department of Trade and Industry (DTI) and the Department of Agriculture (DA) to implement measures that would cut the gap between farm-gate and retail prices of agricultural products.
The Office of the President (OP) also issued MO 27, which directs the DA, the Department of the Interior and Local Government, and the Metropolitan Manila Development Authority (MMDA) to ensure an efficient and seamless delivery of imported agricultural and fishery products from ports to markets.
MO 28, meanwhile, ordered the National Food Authority (NFA) to immediately release last September some 230,000 metric tons (MT) of rice in its warehouses nationwide and immediately distribute 100,000 MT of rice that have been contracted and were expected to be delivered by the end of that month. (Joann Villanueva/PNA)
