BSP hikes ’14, ’15 inflation forecasts

MANILA, June 19 (PNA) — The Bangko Sentral ng Pilipinas’ (BSP) policy-making Monetary Board (MB) on Thursday again revised upwards its average inflation forecast for 2014 and 2015 partly due to the sustained rise of rate of price increases.

In a briefing, BSP Deputy Governor Diwa Guinigundo said this year’s average inflation forecast was raised to 4.4 percent from 4.3 percent set during the Board’s meeting last May.

For 2015, the forecast is now at 3.7 percent, higher than the 3.4 percent last May.

Guinigundo said these changes were made after May 2014 inflation rate rose to 4.5 percent from the previous month’s 4.1 percent due to faster increases on food and beverages, clothing and footwear and water, electricity, gas and other fuels and housing, among others.

Amid the rise in the inflation forecast, he said monetary officials remain confident that inflation for this and next year will not breach the targets unless there future developments that would greatly factor in the rate of price increases.

He cited as risks to inflation the supply-side factors such as negative developments in the agriculture sector, the pending hike in electricity rates, and the still elevated growth of domestic liquidity.

”We’re also looking at the impact of El Nino on domestic prices,” he added. (PNA)