Inflation is now being forecast at below two percent in the third quarter of 2019 due to base effects, Bangko Sentral Gov. Benjamin Diokno said.
“Third quarter will be much lower than the second quarter,” he told journalists Wednesday.
After peaking at 6.7 percent in September and October 2018, rate of price increases declined to three percent last April.
However, it posted an uptick to 3.2 percent last May but monetary officials believe that this will not continue, with the June inflation rate projected to stay between 2.2 to three percent.
The Philippine Statistics Authority (PSA) is scheduled to report the June 2019 inflation rate on Friday, July 5.
With inflation seen to remain within target in the near term, Diokno said they continue to have “a lot of policy space” due also to monetary easing trend around the globe.
Last May, BSP’s policy-making Monetary Board (MB) slashed by 25 basis points the central bank’s key policy rates due to manageable inflation outlook and global growth weakness.
Diokno said “expect some” more cuts in the coming months but declined to elaborate.
“Just be patient. We'll get there eventually,” he said, pointing out that they continue to assess the impact of their previous cut on key policy rates as well as on banks’ reserve requirement ratio.
“Right now, we’re still studying it,” he added.