Philippine c.bank raises 2014, 2015 inflation f'casts; sees drop in money supply growth

MANILA Thu May 8, 2014 4:28am EDT

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MANILA May 8 (Reuters) - The Philippine central bank on Thursday raised its inflation estimates for this year and next, but said the outlook for inflation remains manageable with money supply growth seen decelerating by the middle of the year.

However, it sees potential price pressures from drier weather due to the El Nino weather pattern that could hurt the country's farm output, as well as pending increases in power and transport prices.

The central bank now sees average inflation at 4.3 percent this year from 4.2 percent previously, and 3.4 percent for 2015 from 3.2 percent.

Both remain within the BSP target of 3-5 percent for this year and 2-4 percent for next year.

Earlier, the central bank kept its policy rate steady at a record low of 3.5 percent but raised reserve requirements by one percentage point for the second meeting in a row to dampen strong money supply growth that could stoke higher inflation. (Reporting by Erik dela Cruz and Siegfrid Alegado; Editing by Kim Coghill)

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