International

Business and
Trade
Group 7
Leader
Mapoy, Niño
Members
Amato, Stephanie
Kasuyo, Laica
Revilla, Girlie
Talledo, Mark Gio

BSA II
February 29, 2020
BSP sees inflation in early 2020 to range
between 2.4 to 3.2 percent
Prices of basic goods and services may have increased at a more moderate pace in
February due to lower food prices, and further mitigated by lower energy costs, the
central bank said on Friday (Feb. 28).
In a press statement, economists of the Bangko Sentral ng Pilipinas (BSP) said they
expected the inflation rate in the second month of 2020 to have risen from 2.4 to 3.2
percent.
“Lower prices of petroleum products, electricity, and rice as well as other food products
are expected to temper price pressures in February,” the BSP’s Department of
Economic Research said.
The central bank’s forecast range for February is slightly lower than the inflation rate of
2.5 to 3.2 percent that it had predicted for January.
That figure eventually turned out to be 2.9 percent – near the midpoint of BSP’s
expectations – as announced officially by the Philippine Statistics Authority a few days
later.
“Looking ahead, the BSP will remain watchful of economic and financial developments
to ensure that its primary mandate of price stability conducive to balanced and
sustainable economic growth is achieved,” the central bank’s economists said.
The policy making Monetary Board is scheduled to convene on March 19 for their
second interest rate-setting meeting for 2019, during which it would evaluate the
country’s economic situation to determine whether more interest rate cuts were needed
to spur growth.
Apart from a tame inflation environment, analysts also expected the central bank to take
into consideration the potential risks posed by the Covid-19 virus outbreak on the
Philippine economy.
Already, the Monetary Board cut it’s key interest rate by 25 basis points in early
February as a “preemptive” move against weaker economic growth after the gross
domestic product figure for the fourth quarter of 2019 turned out to be lower than
expected.
Earlier this year, BSP Governor Benjamin Diokno said he expected prices of basic
goods and services in the Philippines to inch up in 2020 as the inflation rate continued
to “normalize” then ease up in 2021.
Despite this, the country’s average inflation rate for 2020 and 2021 will almost certainly
fall within the government’s forecast range of 2-4 percentage points, according to
Diokno.

Analysis

What: BSP sees inflation in early 2020

When: February 2020
Where: Philippines

Economist of BSP expected that inflation rate will be increase in the month of February
from 2.4 to 3.2 percent, this expected rate is predicted in January by the economist. It is
because of the risks we had in the Philippines, the NCov19 and also the lower costs of
energy. 
If inflation rate would rise up, supply of goods and services will decrease and demand
increases due to the prices rise up. People will have their panic buying if this would be
happened. If we're having this kind of economic failure, poverty will rise up and there is
an expected corruption especially in politics.
Since this is just a prediction, but still the BSP is being watchful to economic and
financial developments to assure that there is a stability to sustain and balance the
growth of economy.