Monetary Board holds rates steady despite high January inflation

February 8, 2018

Despite January inflation hitting a three-year high, the Monetary Board kept interest rates steady in Thursday's policy meeting.

"While the latest baseline forecasts show higher inflation outturns for 2018, the inflation path is expected to moderate and settle within the inflation target range of 3.0 percent, plus-minus one percentage point, in 2019," Bangko Sentral ng Pilipinas Governor Nestor Espenilla said in a  statement.

The Monetary Board, policy-making body of the central bank, said : "it will continue to closely monitor the evolving conditions for prices and output and any threats to the inflation target."

Espenilla added "the higher inflation in January is due to better enforcement on tax laws on tobacco as well as temporary increases in prices of selected food items, such as fish an vegetables," added Espenilla.

January inflation reached four percent, exceeding December 2017's 3.3 percent. The data represented the upper end of the government' inflation target of 3-4 percent from 2017 to 2019. DMS