BANGKO Sentral ng Pilipinas (BSP) Governor Benjamin Diokno on Tuesday announced their forecast of a tamer inflation in March 2020 amid the enhanced community quarantine in Luzon and other parts of the Philippines during the month.
Diokno said their Department of Economic Research projects March 2020 inflation to settle within the 2.0-percent to 2.8-percent range. The average inflation rate for the first two months of 2020 is at 2.8 percent.
“The sharp decline in the prices of petroleum products due to the significant fall in global crude oil prices contributed to the downward price pressures for the month. In addition, the prices of selected food products remained broadly stable in March due to adequate supply and favorable weather conditions along with the price freeze imposed on basic necessities by the Department of Trade and Industry (DTI) and the Department of Agriculture (DA),” the BSP said in a statement.
Meanwhile, the BSP noted that electricity rates in Meralco-serviced areas were slightly higher during the month.
The central bank said earlier that the Covid-19 outbreak and the resulting enhanced community quarantine (ECQ) is expected to put a negative pressure on local consumer prices as domestic demand falls and prices of imported goods, like oil, crash.
The subdued inflation also allowed the BSP to inject further stimulus into the economy through various traditional and extraordinary measures.
To date, the BSP has: pledged to remit P20 billion in dividends ahead of time to the national government, arranged for the purchase of government securities from the Bureau of Treasury (BTr) under a repurchase agreement in the amount of P300 billion, cut the reserve requirement ratio cut by 200 basis points, and reduced its policy rate by 50 basis points.
“Going forward, the BSP will continue to monitor economic and financial developments, and stands ready to implement appropriate policies in support of its primary mandate of price stability conducive to balanced and sustainable economic growth,” the BSP said in its latest statement on Tuesday.
Diokno is scheduled to lead the monetary board into its next policy meeting on May 21.
Image credits: Roy Domingo