Philippine National Bank, the fifth-largest lender led by airline and tobacco tycoon Lucio Tan, expects the Bangko Sentral ng Pilipinas to have bigger policy rate cuts this year on slower inflation rate due in part to the impact of coronavirus disease or COVID-19.
In a report Friday, PNB Macro Research cited the slowdown in consumer prices in February 2020 to 2.6 percent from 2.9 percent a month ago.
The February inflation was significantly slower than 3.8 percent a year ago. The figure brought the average in the first two months to 2.75 percent, well below the midpoint of the target range of 2 percent to 4 percent.
“COVID-19’s impact on February inflation (with emphasis on the lower oil/fuel price effects) resulted in a trajectory that turned benign compared to the pre-COVID outlook,” the report said.
PNB said in March the headline inflation could dip to 2.5 percent year-on-year. It said post-COVID, inflation could re-test 2.7 percent in June-July before probing 3 percent in the fourth quarter.