- Inflation expectations anchored, below target at an average of 1.7%
- Central bank remains ‘data dependent’ on future rate decisions
- BSP to review policy on December 11
PANGLAO, Philippines — Inflation expectations in the Philippines are “more or less anchored”, its central bank governor said on Monday, adding he was “happy” at consumer price increases averaging below their target level over the year so far.
Inflation has stood at an average of 1.7% in the first 10 months of the year, below the Bangko Sentral ng Pilipinas’ 2% to 4% target range.
“Our inflation expectations are, I would say, more or less anchored,” Remolona told a press conference at a central bank symposium.
“Expectations are not too far away from our target, especially if you look at two years down the road. That gives us comfort, but at the same time we’re still working to try to measure anchoring…more precisely,” he added.
The central bank, he said, is “not too concerned” with the specific inflation target level, saying he was already “happy” with the 1.7% inflation average for the year.
“Essentially, we just want low inflation.”
Remolona did not say directly whether muted inflation expectations could warrant another easing next month, saying the BSP will remain data dependent. The Monetary Board will review policy rates for a final time this year on December 11.
The Philippine central bank surprised the market last month when it cut its benchmark rate for a fourth straight time to 4.75%, defying expectations it would remain unchanged.
BSP at the time signaled room for further easing, citing growing concern over the economic fallout from a corruption scandal that has gripped the graft-weary nation.
Government authorities are investigating a massive scandal tied to infrastructure projects designed to tackle flooding. An anti-graft court last week ordered the arrest of over a dozen people involved in some of the projects.
Philippine President Ferdinand Marcos Jr. said in a social media post on Monday that at least seven of 16 accused people are now in custody. Two others have said they are prepared to surrender.
The scandal has weighed on Philippine economic growth, which stood at just 4.0% in the third quarter, the slowest pace in four years, after a steep decline in government infrastructure spending.
—Reporting by Mikhail Flores; Editing by Martin Petty and David Stanway
