The Bangko Sentral ng Pilipinas (BSP) is seeing a 2.9-percent average inflation rate this year.
Deputy Governor Diwa Guinigundo said that the average inflation rate for 2013 will still be within the central bank’s 3-percent to 5-percent target band.
However, the BSP official said that inflation forecast for 2014 was raised from an earlier projection of 4 percent to 4.5 percent.
Guinigundo explained that the higher inflation projection for next year is on the account of higher global oil prices, utility rate adjustments, and the impact of the recent typhoons.
For 2015, the BSP deputy governor said that the inflation would settle at 3.2 percent from an earlier estimate of 3.4 percent.
“Future inflation path continues to be within the target over the policy horizon since the uptick is expected to be largely transitory. Meanwhile, market expectations of inflation remain consistent with the target range,” BSP Governor Amando Tetangco Jr. also said during the press briefing on the latest monetary policy stance of the central bank.
Inflation targeting is an approach to monetary policy that involves the use of a publicly announced inflation target set by the government, which the BSP commits to achieve over a two-year horizon.
Promoting price stability is the central bank’s main priority, and the target serves as a guide for the public’s expectations about future inflation, allowing them to plan ahead with greater certainty.