Private economists in the country continue to lower their inflation expectations this year, owing largely to the huge reduction in oil prices as compared to last year.
Results of the Bangko Sentral ng Pilipinas’s (BSP) survey on private-sector economists for March 2015 yielded lower mean-inflation forecasts for this year and next year, relative to the results in the previous quarter ending December 2014.
Private economists in the country now see inflation for 2015 hitting 2.7 percent, lower than the 3.6 percent assumed in the previous quarter.
Meanwhile, for next year, the analysts’ forecast declined to 3.3 percent, from the earlier 3.7-percent mean forecast last quarter. The inflation forecast, meanwhile, for 2017 inflation was at 3.3 percent.
All forecasts are within the government’s inflation-target range for this year, next year and 2017, which is at 2 percent to 4 percent.
“The analysts attributed their lower inflation expectations mainly to the decline of international oil prices, which led to the reduction in minimum jeepney fares and flagdown rate of taxis for the entire country,” the BSP said.
In the first quarter of the year, actual inflation averaged 2.4 percent, as inflation stayed benign during
the three-month period owing to lower oil and rice prices.
For next month, the central bank expects inflation to still remain within the lower band of its annual-target range, mostly still due to lower rice cost, which has a heavy bearing on the country’s consumer price index basket. In particular, BSP Governor Amando M. Tetagco Jr. said inflation in April will likely settle between 1.9 percent and 2.8 percent.
“Price pressures may come from the upward adjustments in local pump prices of oil and power rates. However, the higher energy prices may be offset by the continued decline in rice prices,” the central bank governor said.
In terms of their policy guidance, Tetangco said they will continue to watch developments, and are willing to take policy action to ensure targets are met.
“Moving forward, the BSP will continue to monitor emerging-prices trends and adopt appropriate policies in line with its commitment to the inflation target and in support of the country’s growth objectives,” Tetangco earlier said.