‘July-Sept inflation could go below 2%’
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Wed, 03 Jul 2019 16:19:27 +0000
THE Philippines’ inflation rate could ease to below 2 percent in the third quarter, according to Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno.
“If you just look at the base effects, [the] third quarter (inflation rate) can really be around 2 percent or even lower,” Diokno said in an interview on Wednesday.
The projected figure is higher than the shock 6.2 percent posted in July to September 2018, which was attributed to increased food and energy prices.
According to the latest data, headline inflation rose to a two-month high of 3.2 percent in May from 3 percent in April, bringing the year-to-date rate to 3.6 percent, which falls within the government’s 2- to 4-percent target range.
The Philippine Statistics Authority (PSA) is set to release on July 5 official June inflation data, which the central bank said likely eased to between 2.2 and 3.0 percent.
This year, monetary authorities forecast inflation to average 2.7 percent before rising to 3 percent in 2020.
Diokno earlier said monetary authorities believed inflation expectations have moderated further, while risks to the inflation outlook were also observed to be “broadly balanced” for this year and next.
He added that this outlook continued to be tempered by weaker global economic prospects amid a possible easing in global demand and increased trade tensions.
Meanwhile, the potential adverse effects of a prolonged El Niño spell remain a key upside risk to inflation.
Also taking into account the firm domestic growth prospects, the BSP policy-making Monetary Board decided to take a “prudent pause” on reducing interest rates.
The Bangko Sentral’s overnight borrowing, lending and deposit rates were kept at 4.50 percent, 5 percent and 4 percent, respectively, after the board held its fourth policy meeting for 2019 on June 20.
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