THE Bangko Sentral ng Pilipinas (BSP) will review its 2012 inflation target as soon as possible to take into account the government’s adoption of a new price series.
The National Statistics Office shifted to a new price series in computing inflation, shifting the base year to 2006 from 2000 previously and revising the relative weights of the components of the basket of goods and services used to calculate the price measure.
“We should review our targets soon using the 2006 series,” BSP Governor Amando Tetangco Jr. said.
Monetary authorities had set an inflation target range of 3 percent to 5 percent for both 2011 and 2012 based on the 2000-price series.
The central bank will start using the new price series by January 2012, since monetary authorities are awaiting the historical series that the NSO would release.
Tetangco said the BSP is looking at a two-year horizon when announcing its inflation target, but the review of the target for 2012 was necessitated by “an unusual development, which is the change in the base year.”
In July last year, the BSP adopted an inflation target of between 3 percent and 5 percent for 2012 to 2014. Up until then, the central bank had used a variable annual inflation target.
The policy-making Monetary Board will meet today to decide on policy rates based on the latest inflation figure and on the inflation outlook.
The central bank chief earlier said there was no urgency to adjust the policy rates at this point, given the benign inflation rate in August.
“We will have to continue to monitor the developments. But barring any surprises on the inflation side, I don’t see any urgency for changing the monetary policy stance at this point and in the near future,” Tetangco, who recently was voted one of the world’s top six central bankers by New York-based Global Finance, said.
He said the August inflation reading confirmed the BSP’s assessment that inflationary pressures have moderated and that the headline figure would likely be within the target range.
“Given this, the fact that there’s been some slowdown in economic growth, the stance of monetary policy will have to be supportive of sustained growth for the economy,” he added.
