Inflation expected to fall further: BSP to maintain policy stance if current trend continues

MANILA, Philippines - Inflation may fall further following the decision of the Organization of the Petroleum Exporting Countries (OPEC) not to cut the current level of oil production, Bangko Sentral ng Pilipinas Governor Amando Tetangco said yesterday.

Tetangco told reporters domestic inflation may further decelerate if “such soft global oil prices would get translated to lower pump prices.”

The OPEC, which supplies a third of the world’s oil requirements, last week announced there would be no cuts in petroleum production despite the declining  prices of oil in global markets.

The price of Asian benchmark Dubai crude went down to $76.74 per barrel in November from an average of $86.65 in October. The price per barrel of Dubai crude stood at $103.99 in January this year.

The country’s inflation eased to 4.3 percent in October from 4.4 percent in September.

The November inflation data will be released today.

Tetangco last month said that if inflation continues on a decelerating trend and there remains no signs of second-round effects, the BSP may well keep the current monetary policy stance.

 “At this point, there has been no significant change in assessment,” Tetangco said.

The central bank in October kept key policy rates steady on expectations inflation will remain within the goals for this year until 2016. Earlier, the BSP hiked the overnight borrowing and overnight lending rates by a total of 50 basis points to ensure inflation will fall within the target.

Monetary authorities have a three to five percent target for this year and a two to four percent goal for 2015 and 2016.