Inflation likely eased to as low as 1.9 percent in April from 2.5 percent in March following the decline in global crude prices, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said Thursday.
The BSP Department of Economic Research said inflation in April would likely settle within a range of 1.9 percent to 2.7 percent. The Philippine Statistics Authority will release the official figure next week.
“The progressive fall in inflation will continue. The collapse in oil prices is expected to moderate inflationary pressure coming from higher prices of rice and other food items along with upward adjustments in electricity rates in Meralco-serviced areas,” Diokno said.
Diokno said the BSP would remain watchful of economic and financial developments here and abroad to ensure that monetary policy settings remain consistent with price stability conducive to a balanced and sustainable economic growth.
The government revised downward the 2020 inflation forecast to a range of 1.75 percent to 3.75 percent from the previous estimate of 2 percent to 4 percent, taking into account the latest global developments including the declining oil prices.
The new forecast was approved by the Monetary Board on March 26 and the interagency Development Budget Coordinating Committee on March 27 through an ad referendum.
“That was the revised forecast by the government, down from the original forecast of 2 to 4 percent. Inflation target range is subject to quarterly review by the DBCC. The inputs come from the BSP but the final decision is made by the members of the DBCC,” Diokno said.
The BSP forecasts monthly inflation based on a host of international variables such as oil prices, commodity prices, and foreign exchange.
Domestic variables, on the other hand, include the price of rice, transport fees, utility rates and minimum wages.
Inflation in the first quarter averaged 2.7 percent, below the midpoint of the target range of 2 percent to 4 percent.
Inflation averaged 2.5 percent in 2019, slower than 5.2 percent in 2018.
