An economist forecasts more stimulus measures from the Bangko Sentral ng Pilipinas (BSP) as the economy continues to battle the pandemic’s impact.
In a report, ING Bank Manila senior economist Nicholas Mapa said he expects monetary authorities to keep the central bank’s accommodative stance until 2022 “given expectations that the economy will be stuck in low gear throughout the second half of the year.”
“(BSP) Governor (Benjamin) Diokno did mention that BSP could dig deeper into their policy toolkit and or extend its pause for longer should the growth outlook be threatened further. From here, it appears that the bias is possibly for even more stimulus from BSP despite a marginal miss on the inflation target,” he said.
During the rate setting meeting of the BSP’s policy-making Monetary Board on Thursday, the Board hiked the central bank’s average inflation forecasts for 2021-2023 by one percentage point in each year to 4.1 percent for this year and 3.1 percent for 2022-2023.
Monetary authorities traced the hikes in the average inflation forecasts for the three-year period to the impact of increases in global commodity prices as economies recover.
They said the rate of price increases in the country likely peaked last February at 4.7 percent after it decelerated to 4 percent last July.
However, the average inflation in the first seven months this year of 4.4 percent is still above the government’s target band of 2 percent to 4 percent.
Monetary authorities expect the elevated inflation rate to last until this quarter.
“We do expect BSP to look past the potential breach to the inflation target with the likelihood of preemptive recalibration likely very low at this point,” Mapa added.
Source: Philippines News Agency
