The central bank on Tuesday (April 7) cheered the lower inflation rate in March, which was below February’s level, but said the pace of price increases for basic goods and services was likely to slow even further this month.
In a mobile phone message to reporters, Bangko Sentral ng Pilipinas Benjamin Diokno said the inflation rate for April 2020 will “likely to be even lower, with the collapse of world oil prices, the price freeze on basic necessities, zero or near zero increase in utilities.”
According to the government, prices across the local economy rose by an average of 2.5 percent last month, which was well within the BSP’s forecast of 2.0-2.8 percent forecast range.
This confirmed the downtrend in the inflation rate this year, which came in at 2.9 percent in January and 2.6 percent in February.
In a separate statement, the central bank said the latest price data were consistent with its prevailing assessment that inflation was expected to be benign due to the potential adverse impact of the COVID-19 pandemic on the domestic and global economic environment.
During its monetary policy meeting last week, the Monetary Board noted that the balance of risks to the inflation outlook now leans toward the downside for both 2020 and 2021.
“The uncertainty over the strength and duration of the pandemic poses significant downside risks to aggregate demand,” the central bank said.
The Monetary Board noted that while the enforcement of quarantine measures could help in slowing the spread of the virus, the resulting disruptions to industries and private spending are likely to reduce economic growth in the near term.
“Moreover, COVID-19 has likewise dampened prospects for the global economy, which could negatively impact tourism, trade, overseas Filipino remittances and foreign investments,” the agency explained.
Saying it recognized that the health and safety of the Filipino people remains the government’s foremost priority, the central bank reiterated its support for urgent and carefully coordinated measures with other government agencies.
These measures are aimed at alleviating the spillover effects of the pandemic on people and firms, with a view toward preventing any long-lasting economic and social damage.
“In addition to the monetary policy actions that have been announced, the BSP stands ready to deploy all available measures in its toolkit as we continue to assess the impact of the global pandemic on the domestic economy,” the central bank said.