MANILA (Xinhua) – The Philippine Statistics Authority reported on Tuesday the country’s inflation rate eased to 2.7 per cent in December from 3.7 per cent in November.
Without food and oil prices, core inflation also went down to 2.3 per cent last month from 2.7 per cent in November.
The December inflation rate brought the full-year average to 4.1 per cent, well-within the three to five per cent target range. This marks the sixth consecutive year inflation fell within the target range, Philippine central bank governor Amando M Tetangco Jr said.
“The significant decline in international oil prices is a dampener on domestic inflation as this has led to lower domestic pump prices, lower transport costs, and lower prices of some imported commodities. However, we are watchful of reversals in this trend,” he said.
For 2015 and 2016, the inflation path remains within the two to four per cent goal for both years, Tetangco said.
The latest level is the slowest pace recorded since inflation hit 2.1 per cent in August 2013, giving the Bangko Sentral ng Pilipinas room to maintain the current stance of policy.
“Given the manageable inflation outlook over the policy horizon, there may be greater scope in the months ahead for policymakers to focus on facilitating and maintaining supportive conditions for domestic demand,” Tetangco said during the first Tuesday Club meeting of the year.
“This time, the assessment is that the stance of policy remains appropriate but we continue to monitor and we will be prepared to make adjustments as may be appropriate or necessary in the future,” he added.
Monetary authorities during its two last rate-setting meetings in 2014 kept key policy rates steady as inflation expectations aligned with the target ranges until 2016. The BSP in the third quarter of last year raised the overnight borrowing and overnight lending rates by a total of 50 basis points to ensure the inflation targets will be met.