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Inflation in the Philippines to return to normal in June

Staff writer |
The Bangko Sentral ng Pilipinas (BSP) expects a more normal path of inflation starting June as the effect of El Niño and the possible upward adjustment in utility rates start to kick in.

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BSP Deputy Governor Diwa Guinigundo said inflation is expected to gradually increase toward the lower end of the two to four percent inflation target set by monetary authorities for 2016 and 2017.

“We believe monthly inflation until I think about the middle of the year will continue to be lower compared to what we saw in 2013 and 2014. Towards the middle of the year, we will expect that it will be closing on the lower end of the target,” he said.

The BSP has lowered its inflation forecast to 2.2 percent from of 2.4 percent this year as risks shifted to the downside due to the continued decline in oil prices in the world market and the lower-than-expected inflation turnout.

“Inflation will remain low probably up to June. Then by June we would expect a more normal path of inflation closer to the target of two to four percent,” he added.

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