By Lee C. Chipongian
The Bangko Sentral ng Pilipinas (BSP) forecasts December inflation rate of 1.8 percent to 2.6 percent, higher than November’s actual 1.3 percent.
In a statement Friday, the BSP Department of Economic Research said this month’s inflation rate could be as high as 2.6 percent due to higher electricity rates and oil prices. The higher rate will also come about because of weather-related disturbances on selected food items.
“(These are) the primary sources of upward price pressures for the month,” said the BSP.
Still, it might be lower at 1.8 percent. “Inflation could be tempered by the continued easing of domestic rice prices,” said the BSP.
According to the central bank, they will continue to be “watchful of evolving price trends and ensure that the monetary policy stance remains appropriate to maintain price stability that is conducive to a balanced and sustainable economic growth.”
For 2019, the BSP forecasts an average inflation rate of 2.4 percent. For 2020 and 2021, 2.9 percent.
The BSP recently announced that the two-four percent inflation target range for 2020 and 2021 will also be adopted for 2022.
It said the two-four percent target is still consistent with the medium-term price stability goal and “conducive to the balanced and sustainable growth of the Philippine economy.”
The BSP also said that the inflation forecasts which is 2.9 percent for 2020
and 2021 gives confidence that the over the policy horizon, inflation will continue to be within-target “even as the balance of risks to the inflation outlook continue to lean slightly toward the upside in 2020 and toward the downside in 2021.”
“While price volatilities cannot be ruled out, inflationary impulses from international commodity prices are expected to remain modest. This expectation is supported by the current assessment of favorable demand-supply balance and lower pass-through to domestic inflation of exchange rate and international commodity price inflation,” the BSP said, adding that “demand-induced price pressures” will continue to be manageable in the next three years at least.