MANILA - The Philippine central bank said on Thursday it expects average inflation this year to be slightly lower than earlier expected despite rising utility prices and a weaker peso, adding that the inflation outlook remains manageable.
Diwa Guinigundo, central bank deputy governor, told reporters the monetary authority expects average inflation this year at 4.3 percent, lower than a previous estimate of 4.5 percent. Average inflation was estimated at 3.3 percent in 2015 against an earlier forecast of 3.24 percent.
The central bank kept its benchmark rate steady on Thursday, but its governor, Amando Tetangco, had said earlier this week the monetary authority could have less room to hold interest rates at record lows due to price pressures.
On Wednesday, the statistics office said the consumer price index in January rose 4.2 percent from a year earlier, the highest since November 2011 and the second month in a row that the rate was above the mid-point of the central bank's 3-5 percent target for 2014.
Meanwhile, Malacanang said it is monitoring the prices of goods even as it said that inflation will be kept within government target of 3-5 percent.
"While the inflation rate in January rose to 4.2 percent, our economic managers are confident that inflation will be kept within the DBCC target, ranging from three to five percent," Presidential Communications Operations Office Secretary Sonny Coloma said.
"While the Philippines and other emerging market economies are feeling the brunt of structural adjustments in the US and other leading markets, the country's sound macroeconomic fundamentals, as reflected in investment grade ratings and our current accounts surplus, firmly support our economic managers' optimism that our economy is in a better position to reap potential benefits from the economic recovery of the US and European countries that trade and invest significantly in the Philippines," he added. - With report from Willard Cheng, ABS-CBN News