The Bangko Sentral ng Pilipinas has raise its inflation forecast for this year until 2015 on account of a projected weakening of the peso, a central bank official said Thursday.
"The Monetary Board always revisits the inflation forecasts. As such, inflation forecasts are up," Bangko Sentral Deputy Governor Diwa Guinigundo told reporters in a press briefing after the Monetary Board's policy meeting.
This year prices of goods and services are expected to accelerate by 3.3 percent from an earlier projection of 3.1 percent.
Monetary authorities also hiked their 2014 inflation projection to 4 percent from 3.6 percent, and to 3.5 percent from 3.4 percent for 2015.
The latest inflation projects were prompted by the peso's "weakening with respect to oil and food imports," Guinigundo said.
The peso is currently trading in the 43-per-dollar level from the 40 to 41 per dollar territory earlier this year, stoking costs of key imports.
The "robust growth" in money supply was also cited as a key factor to the higher inflation projections.
In May, liquidity or money circulating in the financial system expanded by 16.3 percent to P5.3 trillion, fueled largely by banks' lending activities.
Pending petitions for higher wages, utility rates and transport fares were also taken into account by the authorities, Guinigundo noted.
The central bank official, however, said the revised inflation projections remain within the central bank's target for the three years.
"These remain benign projections," he noted.
Well-anchored inflation expectations prompted the Monetary Board to keep policy settings unchanged in its July 25 meeting. — VS, GMA News