BSP hints at a more aggressive action against inflation

A repressed Central Bank hinted on Thursday to more aggressive measures to contain the acceleration of domestic price increases after the government announced that June's inflation rate was exceeding the most anticipated pessimistic.

Governor of the Pilipinas Islands of Bangko Sentral n. Nestor Espenilla Jr. described the higher-than-expected consumer price index for last month – which was at 5.2% a new high for at least five years – as a "setback."

BSP reaffirms its strong commitment to ensure that inflation returns to the target range of 2-4% as soon as possible, "he said, adding that the" monetary authority "will review and actualize its situational assessment and its projected inflation trajectory. "

Using the most aggressive anti-inflation language so far, Mr. Espenilla said the result of the review, he said," will affect the strength and timing of the next response from monetary policy to the firm "."

The central bank has so far raised its policy interest rate twice for a total of 50 basis points over the past two months, that many economists and bankers see as a late response to price increases that began in January of this year.Its day-to-day borrowing rate is now 3.5 percent, which is the base on which financial institutions set their own loans to private borrowers and individuals

., but turned around and began raising interest rates last May after indications emerged that inflation would be worse than expected.

At 5, 2%, the inflation rate is the highest in five years. available in the goods basket of the revised 2012 consumer price index of the government. The latest inflation figure brings the average for the first half to 4.3%

Last week, the economic research department of the BSP declared that it was waiting for it that the inflation rate goes up to 5.1%.

– The results of commodity price increases would have been mitigated by cuts in other sectors.

"Upward pressure on prices of rice and other agricultural products due to weather-related disturbances The rise in liquefied petroleum gas prices could be partly tempered by the reduction in fuel prices and electricity rates in areas served by Meralco, "said Diwa Guinigundo, vice governor of BSP. for the remainder of the year 2018, it eased and, as a result, slightly lowered the central bank 's inflation forecast from 4.6% to 4.5% for this year.

A similar revision was made for the 2019 inflation forecast, from 3.4% to 3.3%.

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