Bangko Sentral cuts 2013 inflation forecast to 3.2 percent

The Bangko Sentral ng Pilipinas has cut its inflation forecast for this year on expectations of lower costs of crude in world market, a ranking official said Thursday. Bangko Sentral deputy governor Diwa Guinigundo said monetary authorities now see consumer prices to rise by 3.2 percent, slower than its earlier projection of 3.3 percent. The new figure was based on “slight reduction of oil prices” in the world market finding its way locally, he said. Guinigundo, however, hiked the inflation forecast to 3.4 percent from 3.3 percent for 2014. “This is in line with pending petitions on adjustments on power rates and possible increase in liquidity,” he noted.   Foreign funds continue to flow into the Philippines as the local economy continues to hurtle forward amid a bleak global setting. This increases the money floating in the financial system and could stoke inflation. Forecasts for both years, however, are still within the Bangko Sentral’s 3 to 5 percent inflation target. Sought for comment, Security Bank economist Patrick Ella agreed with the Bangko Sentral’s finding as “inflation should trend below 3 percent in the coming months due to lower food prices on forecast good harvest.” This, he said, would abate the faster monthly inflation figures last January and February. Inflation slowed to 3.2 percent in March from February’s 3.4 percent, a five-month high, bringing the average in the first three months to 3.2 percent. Consumer prices rose by 3 percent last January. “Going forward, the BSP will continue to monitor emerging price and output conditions to ensure that the monetary policy stance remains consistent with maintaining stable prices while supporting economic growth,” Guinigundo said. — BM, GMA News