The Philippines: Monetary official expects further drop in inflation in Oct 19

  • Inflation may ease further in Oct 19 as oil prices continued to behave well despite the knee-jerk reaction from the attacks in the oil production facilities in Saudi Arabia as well as the expected further decline in rice prices.
  • Bruce Tolentino, a member of the central bank’s Monetary Board, told reporters the consumer price index (CPI) could further ease in Oct 19 after peaking at 6.7% in Sep 18 and Oct 18 due to elevated oil and food prices.
  • “It could go lower. Well even purely from base effects. If you look at the rice prices it is still going lower and oil is not going up,” Tolentino said. “The inflation outlook for the rest of 2019 is it will at least go sideways or lower,” he said.
  • “The reported forecast for 2020 is there will be an uptick and it depends also on what happens to the Middle East. But we are fairly confident that we will stay within the target range at least for 2019 and definitely in 2020,” he said.
  • According to Tolentino, the BSP is opposing the proposed imposition of a safeguard duty on rice imports to protect farmers from the detrimental effects of an import surge arising from the liberalization of the rice industry under Republic Act 11203 or the Rice Tariffication Law.
  • He said the imposition of a safeguard duty on imports could push rice prices higher and fan inflation.
  • Tolentino said monetary authorities are still confident the government could achieve the lower end of its 6%-7% gross domestic product (GDP) growth target for 2019 by pursuing the massive infrastructure program.

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