MANILA: The Bangko Sentral ng Pilipinas (BSP) said inflation would stay within the two to four percent target over the next two years despite the impact of the proposed imposition of higher excise tax on petroleum products and its second round effect on transport fares.
Based on preliminary estimates, BSP Deputy Governor Diwa Guinigundo said the higher excise tax on petroleum products, the corresponding rise in transport fares, and higher electricity rates would stoke inflation by 0.47 percent next year and by 0.43 percent in 2018.
Guinigundo said inflation is seen rising to 2.9 percent next year before easing to 2.6 percent in 2018 from the projected 1.7 percent this year.
Even if you add the estimated increase of 0.47 percent and 0.43 percent, Guinigundo explained inflation rates for 2017 and 2018 are expected to stay within the midpoint of the BSP target.
“So we are still within the inflation target of two to four percent for both years 2017 to 2018,” he added. Inflation kicked up to an 18-month high of 2.3 percent in September from 1.8 percent in August due to faster increase in food and non-food prices. This brought the average inflation to 1.6 percent in the first nine months.
