BSP lowers 2019 inflation outlook to 2.5%
THE Bangko Sentral ng Pilipinas (BSP) revised downward its average inflation forecast for this year to 2.5 percent, its head said on Wednesday.
“Based on [the] BSP’s latest projection, inflation is expected to average at 2.5 percent for 2019, lower relative to the previous forecast of 2.6 percent [as of Aug. 8, 2019] and lower than the official target range of 3.0 percent ± 1.0 percentage point,” BSP Governor Benjamin Diokno said in a message to reporters.
Earlier on the sidelines of a forum in Makati City, Diokno said the latest projection already factored in the recent drone attacks on Saudi Arabia’s oil facilities that caused oil prices to spike.
He also said monetary authorities kept its oil price assumption unchanged at $63.88 per barrel of Dubai crude oil. This figure was a downward revision from its previous projection of $64.56 per barrel.
During its August 8 meeting, the Bangko Sentral’s policy-making Monetary Board (MB) said its “latest baseline forecasts indicate that inflation will continue to ease and settle within the 3.0 percent ± 1.0 percentage point target range for 2019-2021.”
“At the same time, the MB observed that the risks to the inflation outlook remain broadly balanced for 2019 and 2020, while they are seen to tilt to the downside for 2021,” it added.
Monetary authorities also noted that weaker global economic prospects continue to temper the inflation outlook, while the potential adverse effects of a prolonged El Niño episode on consumer price growth have subsided.
In August, headline inflation fell to a nearly three-year low of 1.7 percent. It brought the year-to-date average inflation rate to 3.0 percent, the midpoint of the government’s target range of 2-4 percent for the year.