Philippine central bank says expects well-behaved inflation

MANILA: Philippine inflation is expected to be well-behaved in the policy horizon, but authorities remain watchful of economic developments overseas and the possible impact on capital flows, central bank Governor Amando Tetangco said on Friday.

Tetangco gave comments after official data showed the annual inflation rate in July was 4.6 percent, steady from June and lower than a median estimate of 4.9 percent in a Reuters poll.

The rate was well within the central bank's forecast range of 4.3 percent to 5.2 percent for the month.

"The price increase is consistent with our assessment that prices are going to be well-behaved over the policy horizon, barring supply surprises," Tetangco said in a mobile text message to reporters.

"The BSP (Bangko Sentral ng Pilipinas) will remain watchful of developments, particularly shifts in investor sentiment that affect capital flows," he said.

Copyright Reuters, 2011