BSP: April inflation at 0.7%-1.5%

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The Bangko Sentral ng Pilipinas (BSP) said inflation could moderate to 0.7 percent this month or pick up to 1.5 percent on higher local oil prices and utility rates.

“The BSP forecast suggests that April inflation could settle within the 0.7 percent to 1.5 percent range,” central bank Governor Amando Tetangco Jr. said in a text message to reporters on Thursday.

Inflation picked up to 1.1 percent in March from 0.9 percent in February. Data for April is scheduled to be released by the Philippine Statistics Authority on May 5.

Tetangco said “increase in domestic oil prices, as well as in power and water rates pose inflation pressures during the month.”


During the month, oil companies raised pump prices of diesel and gasoline by P1.50 and P1.10 per liter, respectively.

Meanwhile, power rate by Manila Electric Co. (Meralco) increased by 22 centavos per kilowatt hour this month with the implementation of the Feed-in Tariff Allowance.

Maynilad Water Services Inc., on the other hand, adjusted water rates after implementing a slight increase in its foreign currency differential adjustment starting April.

Maynilad customers consuming 10 cubic meters or less every month will see their water bill increase by P0.15, while those consuming 20 cubic meters every month will see their water bill increase by P0.57.

The BSP’s April forecast is well below the 2 percent to 4 percent target for the year. It has said that headline inflation could average 2.1 percent this year before inching up to 3.1 percent in 2017.

“Going forward, the BSP will continue to monitor possible price pressures to ensure price stability conducive to balanced and sustainable economic growth,” Tetangco said.

No urgent reason to shift stance

In other developments, the central bank reiterated that it sees no urgent reason to change its current monetary policy stance at the moment.

“At the moment, we really do not expect any major developments cropping up that would necessitate a shift in our stance of policy,” Tetangco said in a separate text message following the United States Federal Reserve’s decision to keep interest rates unchanged.

Tetangco said the Fed action of keeping rates on hold was broadly in line with expectation.

The Federal Open Market Committee (FOMC) kept Fed rates unchanged at 0.25 percent to 0.5 percent as expected.

FOMC maintained that it will watch inflation, global and financial developments closely and acknowledged that while household spending moderated and investments and net exports remain soft, the housing sector has improved further since the start of the year.

“The market will, however, continue to monitor changes in nuances and the balance of risk assessment from the Fed,” Tetangco pointed out.

Besides the US Fed’s latest move, the BSP governor, also pointed out that there is still the Bank of Japan meeting and the market is awaiting the announcement.

“That should help clear up global market positioning in the very near term,” he said.

“For our local markets we await the conduct of our national elections, although we don’t foresee significant changes in economic policy thrusts,” he added.

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