MANILA -- ANZ Research on Tuesday discounted inflation concerns as among the factors that Philippine monetary officials will look into vis-a-vis their policy decisions in the near term.
This, after rate of price increases slowed again in October 2019 to 0.8 percent from the previous month's 0.9 percent.
Deceleration of inflation rate last month brought the average rate since last January to 2.6 percent, at the lower half of the government’s 2-4 percent target band until 2021.
ANZ Research forecasts domestic inflation rate to remain within-target until next year.
"Therefore, inflation will play second fiddle to growth concerns at the central bank's next few policy meetings," it added.
In a report, ING Bank Manila lead economist Nicholas Mapa expects inflation upticks as early as December.
He said the expected rise to within-target levels of inflation rate in the coming months will play a role in the Bangko Sentral ng Pilipinas' (BSP) policy stance as BSP Governor Benjamin Diokno "looks to give the domestic economy an added boot amidst the projected global slowdown."
"With inflation forecasted to remain within target even after base effects wash out, the BSP will continue to work to provide an environment conducive for economic growth for as long as the price objective is in hand," he said.
Mapa projects inflation to average at 3.1 percent next year, and for the BSP to further slash key rates by 50 basis points starting in the first quarter.
To date, the central bank's policy-making Monetary Board (MB) has cut the BSP rates by a total of 75 basis points after inflation sustained its drop since peaking to 6.7 percent in September and October last year.
The elevated inflation rate, caused particularly by the rise in domestic rice prices due to supply issues, prompted the monetary officials to hike key rates to reign in inflation expectations. (PNA)
