An employee counts Philippine pesos inside a money changer in Manila September 19, 2013. A Philippine official said a weaker peso will benefit Philippine exporters by making their products less expensive and thus more competitive in the global market.
MANILA (Mabuhay) – Inflation dropped to a 17-month low in January as oil, transport and utilities priceswent down, the Philippine Statistics Authority (PSA) reported Thursday.
Consumer prices decelerated to 2.4 percent in January, compared with 2.7 percent in December 2014 and 4.2 percent a year earlier, PSA data showed.
The January inflation was the slowest in 17 months when the consumer price index eased to 2.1 percent in August 2013.
This fits into the 1.8 to 2.5 percent forecast by Bangko Sentral ng Pilipinas (BSP) for the month.
“It falls within our forecast range and bolsters our view of within-target inflation over our policy horizon,” BSP governor Amando Tetangco Jr. said in a text message to reporters Thursday.
The Development Budget Coordinating Committee (DBCC) has placed the inflation target at 2 to 4 percent this year, saying the outlook remains stable and manageable.
Moving forward, inflation will largely depend on commodities prices, particularly oil, Bank of the Philippine Islands lead economist Emilio Neri Jr. told GMA News Online.
But oil is trading in a quite volatile way in global markets, “so we can’t count out the possibility of breaching the 2 to 4 percent target on both sides,” he said.
Oil prices crashed on Wednesday, with US crude losing 9 percent in one of its biggest daily routs ever, as record high oil inventories in the United States cut short a four-day rally, Reuters reported.
Tetangco said the central bank is keeping a close watch of how things are going in the global arena.
“We will continue to monitor developments, particularly in international oil prices and their impact on financial market volumes and inflation expectation to see if there is need to make adjustments in our policy levers,” he said.
The Monetary Board (MB), the BSP’s policy setting body, will hold its first meeting this year on Thursday, February 12. (MNS)