Philippines inflation to return to target by December, barring shocks: central bank

INFLATION in the Philippines could return to the central bank’s 2 per cent-to-4 per cent target range by December barring supply shocks, Bangko Sentral ng Pilipinas governor Eli Remolona said on Wednesday (Dec 6).

Prices rose at their slowest pace in 20 months in November at 4.1 per cent versus the previous month’s 4.9 per cent, bringing the year-to-date average inflation rate to 6.2 per cent, far above the central bank’s target.

Last month’s slower inflation was not enough to put the central bank’s worries at ease, with the BSP saying on Tuesday there was need to keep monetary policy “sufficiently tight until a sustained downtrend in inflation becomes evident.”

The central bank, which meets for the last time this year on Dec 14, kept interest rates steady at 6.5 per cent at its meeting in November, after an off-cycle 25-basis point hike on Oct 26 amid worries that inflation could spiral out of control.

Remolona said the central bank will not lower banks’ reserve requirement ratio while it is still hawkish. REUTERS