Inflation to ease further as food prices fall: Bangko Sentral

ABS-CBN News

Posted at Jul 19 2019 01:03 PM

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MANILA – Inflation will likely ease further towards the end of the year as food prices go down and as the effects of recent monetary policy adjustments kick in, the Bangko Sentral ng Pilipinas said Friday.

Inflation settled at 3 percent in the second quarter from 3.8 percent in the previous quarter as falling food prices offset price spikes in fuel, data from the BSP showed.

The BSP maintained its June projection that inflation could settle at 2.7 percent in 2019 and at 3 percent by 2020, director for the Department of Economic Research Dennis Lapid said. 

"We continue to see inflation easing. Inflation forecast has been revised downwards and inflation expectations have started to moderate," Lapid said.

The monetary board cut key interest rate by 25 basis points in May but decided to pause last June to "gauge" the impact of the adjustments, he said. 

"A prudent pause would allow the BSP to better gauge the impact of the May monetary adjustment of the overnight policy rate as well as the impact in the adjustment in the reserve requirements which are expected to add to the domestic liquidity going forward," he said.