Monetary Board may cut 2010 inflation forecast

Looking at how inflation eased to a seven-month low in June, monetary authorities might cut its forecast this year and next, Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said Thursday. He said the Monetary Board would review its latest inflation forecast in order to see if there is a need to make adjustments in its policy stance. The latest inflation forecast, where the stronger-than-expected gross domestic product of 7.3 in the first quarter was considered, was within the targets of 3.5 percent to 5.5 percent this year and 3 percent to 5 percent next year. Data from the National Statistics Office showed that annual inflation eased to a seven-month low of 3.9 percent in June from 4.3 percent in May, bringing the average inflation to 4.2 percent for the first half of the year from 5 percent a year earlier. Inflation last month was the lowest since 2.8 percent was recorded in November 2009. Tetangco said the inflation figures gave monetary authorities enough elbowroom to keep its key policy rates at record low during the Monetary Board meeting on July 15. "This inflation path therefore puts the full year inflation targets for 2010 and 2011 fairly safe, and thus provides BSP flexibility when we review the stance of monetary policy next week," he added. —With Jesse Edep/VS, GMANews.TV