MANILA: Year-on-year headline inflation fell to 3.0 percent in the second quarter of 2019 from 3.8 percent in the first quarter of 2019, the country's central bank said on Friday.
"This brought the average inflation for the first half of 2019 to about 3.4 percent year-on-year, which is within the national government's (NG) announced target range of 3.0 percent ± 1.0 percentage point (ppt) for the year," the Bangko Sentral ng Pilipinas (BSP) said in a statement, reports Xinhua.It said inflation continued to ease during the quarter due to the significant deceleration in food inflation amid sufficient domestic food supply.
Similarly, the central bank said core inflation slowed to 3.4 percent in the second quarter of 2019 from 3.9 percent in the previous quarter. "Alternative core inflation measures computed by the BSP were also lower in the second quarter of 2019," the central bank added.
Moreover, the BSP's survey of inflation expectations of private sector economists as of June 2019 showed lower mean inflation forecasts for 2019 and 2020 relative to the results in March 2019.
Analysts expect inflation to remain manageable and within the government's target range, with risks to the inflation outlook likely to be broadly balanced.
"The key upside risks to inflation are seen to emanate from the adverse effects of weather conditions on domestic food supply; volatile global crude oil prices; higher government spending on infrastructure; and the potential impact of African swine fever on local pork prices," the central bank said.
On the other hand, it added that "possible downside risks to inflation are base effects; the continued implementation of non-monetary policy actions to increase domestic food supply and stabilize prices; and lower global commodity prices owing to weaker demand."In an updated supplemental report to its Asian Development Outlook released on Thursday, the Manila-based Asian Development Bank revised down the Philippine inflation forecast for 2019 from 3.8 percent to 3.0 percent.
However, the bank's inflation forecast for 2020 is maintained at 3.5 percent with an expected pickup in global commodity prices.