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MB gearing up to tackle rising inflation, rapid economic activity

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Nestor A. Espenilla, Jr.
‘The inflation outlook continues to be a concern and requires close attention... The Monetary Board will consider what further adjustments are necessary to firmly anchor inflationary expectations and ensure that the inflation target will be achieved in 2019.’ -- BSP Governor Nestor A. Espenilla, Jr.

The Monetary Board (MB) is gearing up for its next rate-setting meeting given a “fairly complex” context of faster inflation and rapid economic activity, the central bank chief said, as the exchange rate also treads a fresh low in over a decade.

“The MB will be evaluating a very rich and broad range of information at its policy meeting next week,” BSP Governor Nestor A. Espenilla, Jr. said in a text message to reporters. “Recent developments on inflation and economic activity are key inputs but these are certainly not the only consideration.”

“We’ll be examining closely all the potential drivers of future inflation through the various transmission channels as affected by global developments, expectations formation, and uncertainty. It’s a fairly complex environment that we need to navigate,” he said.

Mr. Espenilla made the remarks when asked to comment on the continued depreciation of the peso, which weakened further to P53 per dollar on Wednesday. Some analysts are reportedly attributing the downtrend to uncertainty over the BSP’s next moves, ahead of their June 21 rate-setting meeting. — Melissa Luz T. Lopez