The Bangko Sentral ng Pilipinas expects inflation rate to continue its downward trajectory in the months ahead and settle well within the target range of 2 percent to 4 percent until 2021.
The BSP, in the highlights of the Monetary Board meeting held on Aug. 8 and released Friday, said the risks to the inflation outlook appeared to be broadly balanced for 2019 and 2020, but were tilted to the downside in 2021.
“Petitions for electricity rates and transport fare adjustments, the proposed increase in the excise taxes of alcoholic beverages, and the potential impact of a prolonged El Nino episode are the main upside risks to future inflation,” the BSP said.
“Meanwhile, slower global economic growth due to the escalation of protectionist policies in advanced economies, as well as geopolitical tensions continue to be the main downside risks to the projected inflation path,” it said.
Results of the latest BSP survey conducted in July 2019 for private sector economists showed lower mean inflation forecasts for 2019 and 2020 at 2.8 percent (from 2.9 percent in the survey a month ago) and 3.1 percent (from 3.2 percent), respectively.
