Inflation likely averaged below BSP target – FMIC

CEBU, Philippines - Inflation is likely to average only slightly faster in the  second quarter to 1.4 percent, still way below the central  bank's 2-4 percent target, according to First Metro Investment  Corp.

In a research note for May, FMIC, investment bank of Metrobank  group, said: "This would allow consumers greater leeway to  increase spending..."

"And while crude oil prices have bounced back from their lows  in January, few really think any major breakaway from the  $40/barrel level."

The Bangko Sentral ng Pilipinas projects inflation at between  1.1-1.9 percent in May.

The Philippine Statistics Authority is to release May inflation  data on June 7.

In April, inflation grew 1.1 percent. On average, prices of  basic goods grew 1.1 percent in the first four months of 2016.

FMIC further noted that monetary policy is expected to remain  steady at least up to the third quarter, as inflation is very  much under control and money growth has only begun to rise at a  pace slightly above 10 percent.

"We do not expect much improvement in the export front, as the  US economy appears to have weakened in Q1. OFW remittances  continue to confound pessimists and we think they