BSP: LOWER IN­FLA­TION UN­TIL 2020

With de­clin­ing oil prices and bet­ter food sup­ply, Bangko Sen­tral ng Pilip­inas Deputy Gover­nor Diwa Guini­gundo says the year could end with a 5.2-per­cent in­fla­tion rate

Sun.Star Cebu - - BUSINESS - KATLENE O. CA­CHO / Ed­i­tor @katCa­cho

The Bangko Sen­tral ng Pilip­inas (BSP) is see­ing lower an­nual in­fla­tion rates for the rest of 2018 un­til the next two years.

BSP Deputy Gover­nor Diwa Guini­gundo on Fri­day, Nov. 9, told Ce­buano stake­hold­ers that the 2018 in­fla­tion rate is not ex­pected to be per­sis­tent and re­cur­rent in the next two years, as the coun­try’s in­fla­tion­ary en­vi­ron­ment has al­ready shown sig­nif­i­cant de­cel­er­a­tion.

Dur­ing the Su­long Pilip­inas 2018-Philip­pine Devel­op­ment Fo­rum: Hak­bang Tungo sa Kaun­laran held at the City Sports Club Cebu, Guini­gundo high­lighted that in­fla­tion for the past 10 months has been sup­ply-driven, with in­creases in oil prices in the global mar­ket as one of the ma­jor con­trib­u­tors.

“We are not ex­pect­ing the in­fla­tion rate this year to repli­cate in 2019 and 2020,” said Guini­gundo.

Re­cent de­vel­op­ments both in ex­ter­nal and in­ter­nal fronts have shown signs of im­prove­ment.

He ex­plained they are see­ing prices of fuel in the world mar­ket go­ing down, im­pact of the Tax Re­form for Ac­cel­er­a­tion and In­clu­sion (Train) Law ta­per­ing off, sta­ble rice sup­ply in the mar­ket, and the gov­ern­ment im­ple­ment­ing mit­i­gat­ing mea­sures to tem­per in­fla­tion.

Guini­gundo ex­pects con­sumer spend­ing in the last quar­ter of the year to re­main ro­bust now that in­fla­tion is eas­ing.

“This re­flects the re­sult of the Con­sumer Ex­pec­ta­tion Sur­vey that showed con­sumers are now more op­ti­mistic in the last quar­ter of the year, pre­cisely be­cause of the hol­i­day, start of the har­vest sea­son, and the im­ple­men­ta­tion of pub­lic and pri­vate projects, which all mean jobs,” said Guini­gundo.

Oc­to­ber in­fla­tion re­mained steady at 6.7 per­cent. Con­sumer prices peaked at 6.9 per­cent in Au­gust.

In­fla­tion is the rate at which the gen­eral level of prices for goods and ser­vices is ris­ing and, con­se­quently, the pur­chas­ing power of cur­rency is fall­ing.

Aver­age in­fla­tion rate in the last 10 months stood at 5.1 per­cent.

The BSP ex­pects to end the year with a 5.2-per­cent in­fla­tion rate and 4.3 per­cent (from 3.7 per­cent) and 3.2 per­cent re­spec­tively, for 2019 and 2020.

If the Rice Tar­if­fi­ca­tion Bill

is ap­proved by Congress dur­ing this fourth quar­ter of 2018, Guini­gundo said in­fla­tion in 2019 is ex­pected to fur­ther de­cline by 0.7 per­cent­age point.

The tar­iff bill is ex­pected to re­duce rice prices by P2 to P7 per kilo and en­hance the pro­duc­tiv­ity of farm­ers through its tar­iff rev­enues, which will be given to them to im­prove their per­for­mance.

Guini­gundo em­pha­sized that de­spite the do­mes­tic pres­sures and soft­en­ing of the global mar­ket, the coun­try is poised to con­tinue its healthy growth story.

He said the coun­try has enough buf­fers for the next 10 years for it grow in­clu­sively and to con­tinue its growth mo­men­tum.

Filipinos, he said, can bank on the coun­try’s pos­i­tive eco­nomic growth in the last 76 con­sec­u­tive quar­ters or 19 con­sec­u­tive years, a tes­ta­ment of how re­silient the coun­try is amid global and do­mes­tic pres­sures.

Su­long Pilip­inas is an an­nual con­sul­ta­tive con­fer­ence be­tween the Duterte ad­min­is­tra­tion and the pri­vate sec­tor. Af­ter Cebu, the gov­ern­ment’s eco­nomic team will go to San Fer­nando in La Union, Clark in Pam­panga, and Davao City.

SUN­STAR FOTO / AMPER CAMPAÑA

SU­LONG PILIP­INAS FO­RUM. Bangko Sen­tral ng Pilip­inas Deputy Gover­nor Diwa Guini­gundo (right) says Filipinos can bank on the coun­try’s re­silience, show­ing pos­i­tive growth for 19 con­sec­u­tive years With him are Fi­nance As­sis­tant Sec­re­tary Karl Ken­drick Chua (cen­ter) and Bud­get As­sis­tant Sec­re­tary Rolando Toledo.

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