By Joann Santiago
MANILA, March 26 (PNA) — Lower-than-forecast hike in minimum wage in the National Capital Region (NCR) was attributed as among the reasons for the drop in the Philippine central bank’s average inflation forecast for this.
In a briefing Thursday, Bangko Sentral ng Pilipinas (BSP) OIC and Deputy Governor Diwa Guinigundo said they now see inflation to average at 2.2 percent this year, down from the 2.3 percent projection last February.
The central bank’s policy-making Monetary Board (MB), during their policy meeting Thursday, maintained the 2016 average inflation at 2.5 percent.
The increase in minimum wage in the private sector will take effect in mid-April 2015. The minimum wage will now be Php481 per day.
On the other hand, the central bank revised upwards its oil price projection.
To date, the BSP forecasts domestic oil to be at Php37.43 per liter this year and Php35.69 per liter for next year.
These are higher than the projections made during the Board’s policy meeting last month, which are Php34.90 per liter for this year and Php33.85 per liter for 2016.
Amid the increase in the oil price projection, Guinigundo said they remain confident that inflation for the two-year period will be at the lower end of the government’s two to four percent target.
Similarly, the BSP official said they remain hands off on the currency trading in the country and only joins the market to ensure an orderly trading.
This even as the local currency posted its more than two-month low against the dollar Thursday at Php44.83.
Guinigundo said domestic foreign exchange “regime remains flexible” but cited that “there is some scope for the BSP’s part in foreign exchange maret to make sure that trading is orderly.
”We don’t tamper with exchange rate and choosing winners and losers in the process,” he added. (PNA)