Headline inflation rose slightly in the first quarter of 2016 to 1.1 percent, nudged upward by modest upticks in selected food items, data from the central bank showed on Friday.
Growth in the consumer price index (CPI) rose from 1 percent in the fourth quarter of 2015, the Bangko Sentral ng Pilipinas (BSP) said in its First Quarter 2016 Inflation Report.
“Modest upticks in the prices of selected food items contributed to the marginal increase in the inflation reading,” it said.
Meanwhile, non-food inflation remained steady overall as declines in utility rates were offset by increases in other items such as transport fares.
Policy settings appropriate
The central bank said its current monetary policy settings are appropriate, as inflation is projected to settle within the BSP’s 2 percent to 4 percent target range for 2016 and 2017.
The BSP said measures of domestic economic activity continue to be positive despite indications that global economic growth has been slower than anticipated.
“At the same time, although inflation pressures remain largely subdued, the sustained buoyancy of domestic demand continues to allay concerns on potential deflationary pressures,” it said.
The BSP hinted that changes in monetary policy are unlikely in the near future, pointing out that the reasonable growth pace of liquidity and credit suggest “that the economy may not be in need of further monetary stimulus at the moment.”
Going forward, the central bank noted it has scope to further assess whether weaker external conditions and heightened financial market volatility would require an appropriate policy response.
“The BSP will continue to monitor these domestic and external developments to ensure that the monetary policy stance remains consistent with its prices and financial stability objectives,” it said.