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Price spikes not expected

Joshua Lao

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The cost of goods will rise but within manageable levels, the country’s top banker announced on Tuesday.

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said the government is looking at June inflation to settle within the 1.9 to 2.7 percent range, coinciding with the government’s 2 to 4 percent target.

The latest projection by the BSP is at par with its outlook month-ago, with inflation in May already averaging 2.1 percent.

Diokno said the BSP Department of Economic Research (BSP-DER) expects upside pressures to emanate from higher gasoline, diesel and kerosene prices as well as an incline in rice prices amid supply bottlenecks.

“These could be partly offset by slower liquefied petroleum gas (LPG) price and electricity rate in Meralco-serviced areas during the month,” the BSP-DER said.

Floor estimate

The BSP expects inflation to average at 2.3 percent for 2020, closer to the lower end of the government’s target and slightly above their key interest rate of 2.25 percent.

Department of Finance Secretary Carlos Dominguez III earlier recognized the country’s benign inflation environment as among the positive metrics that allowed the Philippines to secure its strong fiscal position.

In all, the BSP chief reiterated a commitment to remain vigilant of market developments in line with their primary mandate.

“Looking ahead, the BSP will continue to monitor evolving economic and financial conditions to ensure that the monetary policy stance remains consistent with the BSP’s price stability mandate,” Diokno concluded.

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