Economists see 2.9% inflation this year
Credit to Author: Mayvelin U. Caraballo, TMT| Date: Sun, 26 Jan 2020 16:15:13 +0000
THE Bangko Sentral ng Pilipinas (BSP) reported that economists have forecasted the country’s inflation to settle at 2.9 percent this year, matching 2.5-percent full-year projection but still within its 2- to 4-percent target.
In its Fourth Quarter Inflation Report, the central bank said the latest figure was lower than the 3.1 percent in the September 2019 survey.
“Analysts anticipate a benign inflation environment in 2020,” it added.
Economists see upside risks to consumer price growth to come from the implementation of other packages under the Comprehensive Tax Reform Program such as the excise taxes on oil and tobacco, the BSP added.
The third and final tranche of fuel excise tax hike under the Tax Reform for Acceleration and Inclusion law took effect last January 1, increasing duties for gasoline and kerosene by P1 per liter, diesel by P1.50 per liter, and liquefied petroleum gas by P1 per kilogram.
Meanwhile, the excise tax on cigarettes rose from the current P35 per pack to P45 also last January 1, as mandated under Republic Act 11346.
Tobacco products, on the other hand, will be taxed with new rates of P25 per pack this year under a newly signed law.
The BSP also said based on the probability distribution of the forecasts provided by 21 out of 26 respondents, there is an 88.5-percent probability that average inflation in 2020 will settle between the 2- to 4-percent range.
BSP Governor Benjamin Diokno noted earlier that its baseline projections still indicated that consumer price growth was likely to remain within the target range of 2- to 4-percentage points this year but “the balance of risks to the inflation outlook continues to lean slightly toward the upside.”
Upside risks over the near term would come from potential volatility in international oil prices amid geopolitical tensions in the Middle East, and the potential impact of recent weather disturbances and natural hazards on local food prices, he added.