Bangko Sentral says May inflation benign

Consumer prices is seen remaining benign this month as lower utility rates and a strong peso offset higher petroleum and tuition fees, the Bangko Sentral ng Pilipinas said Monday. 

 

In a text message to reporters, central bank Governor Amando Tetangco Jr. noted the Bangko Sentral “forecasts inflation in May to settle within the range of 2.2 to 3.1 percent.

 

“Higher prices of petroleum products and select food items, the impact of higher tuition fees may be balanced off by the impact of downward adjustments in utility rates and the appreciation of the peso during the month,” he added. 

 

The exchange rate traded between P40:$1 and P41:$1territory in May, stronger than the 42 level a year earlier. 

 

Some 222 higher learning institutions raised college tuition, while the Department of Education allowed 260 school to raise fees for elementary and secondary levels. 

 

 

 

Inflation last April hit 2.6 percent, a 13th month low. The latest inflation figure pulled the year-to-date inflation to 3.0 percent, below the central banks 3.2 percent forecast and at the lower-end of its 3 to 5 percent target for the year.

 

Tetangco said monetary authorities are on their toes monitoring upside risks to inflation, “especially pending petitions for power rates and the impact of capital flows on the financial markets.”

 

Monetary authorities will “make adjustments in policy as necessary” to ensure inflation expectations remain well-anchored, he added. 

 

The Monetary Board has kept policy rates unchanged at record lows of 3.5 percent for overnight borrowing and 5.5 percent for overnight lending since October last year. 

 

It has slashed yield of central bank special deposit accounts—a tool to mop up excess liquidity—to 2 percent. — VS, GMA News