THE country’s headline inflation rate could stay above the 2-percent mark in the near term as global petroleum prices start to rebalance following the decision of oil producing nations to cut output, the Department of Finance (DoF) said on Tuesday.
“Inflation [is]likely to clock in above 2.0 percent in the coming months as suggested by the core inflation of 2.5 percent in January. Rising energy prices will contribute to higher inflation,” Finance Undersecretary Gil Beltran was quoted as saying in a report to Finance Secretary Carlos Dominguez 3rd.
Beltran, who is also the DoF chief economist, noted the World Bank is forecasting world crude prices to rise by 28.5 percent to $55 per barrel on average this year, from $42.8 in 2016.
However, Beltran said the country’s macroeconomic fundamentals remain sound as inflation is within the targeted range.
“This will provide economic authorities flexibility to maintain rapid growth despite uncertainties in the world economy,” Beltran said.
In January, inflation registered its fastest rate in over two years at 2.7 percent, matching the DoF’s internal forecast.
The rise in CPI settled within the 2.3 percent to 3.2 percent range forecasted by the Bangko Sentral ng Pilipinas (BSP) for the month.
However, it fell below the 2.8 percent-to-2.9 percent range estimated by analysts polled by The Manila Times.
The central bank has revised upward its inflation outlook to 3.5 percent for 2017 from 3.3 percent and to 3.1 percent for 2018 from 3 percent.