go through Chloe Mari A. Hufana, reporter
Inflation in April could be below 2%, which puts the Philippine central bank in “many policy areas”, while growth in the first quarter could be close to or below the government’s 6-8% target, which will be a “important factor” for next month’s Monetary Commission policy meeting.
“I think it would be a good number,” Eli M. Remolona, Jr., Governor of Sentral Ng Pilipinas (BSP) in Little Bangkok. He told reporters at the presidential office on Monday that it refers to inflation last month. “This gives us a lot of policy space. It makes our lives easier.”
Inflation could be between 1.3% and 2.1% last month, according to BSP estimates released last week, giving the rest a leeway to further lower the benchmark interest rate.
one BusinessWorld A poll of 14 analysts last week showed that the median Consumer Price Index (CPI) in April was 1.8%, the same as March printing.
The Philippine Bureau of Statistics is scheduled to release April inflation data on Tuesday (May 6) and release preliminary first-quarter GDP data on Thursday (May 8).
Gross domestic product (GDP) growth is likely to be below the full-year target of 6-8%, and also puts pressure on BSPs to alleviate monetary policy and stimulate growth.
Growth will be an important factor [when] We decided in June. ” said Mr. Remorona.
The next policy meeting for BSP will be held on June 19.
The Monetary Commission in April restored its mitigation cycle with a decrease of 25 benchmark points (BP), increasing the critical rate to 5.75%. It lowered 75 basis points in 2024.
According to a median forecast for 15 economists, the Philippines' GDP could rise by 5.8% in the first quarter. BusinessWorldstarting from 5.3% revised in the fourth quarter of 2024.
However, this will be a little slower than the 5.9% growth recorded in the first quarter of 2024.
Reinielle Matt M. Erec, economist at Oikonomia Research and Inc., Reinielle Matt M. Erec, Reinielle Matt M. Erec, Reinielle Matt M. Erec, may reflect slow demand, which slows down, which negatively affects growth. The reduction in reduction can help drive higher demand and allow credit growth. ”
Mr Erece said he understood why BSPs “hesitate” as global uncertainty escalates It will affect inflation.
“Currently, when the Fed is in control of the impact of tariffs, they are hawkish. This may be the move of the BSP that may deviate from the Fed and decide on the policy based on national needs.”
Inflation could drop to 1.6% in April, said Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp. He expects inflation to average 2.2% for the whole year, which is much higher than the BSP’s target range of 2%-4%.
He said that as inflation is softer and economic growth slows, BSP is expected to continue to lower policy rates to support growth.
“In most cases in 2025, relatively benign inflation rates can already be at the 2% level, even at the lower end of the BSP inflation target, or even at the lower end of 2%-4%, so it can be demonstrated/supported future local policy cuts, which will be in line with the future Fed reduction rate in 2025.”
Filomeno S.STA. Mr. Rollona's statement pointed out that Anna III is the coordinator of the reform action for economic reform action.
“Inflation is no longer a binding constraint,” he said in a Viber chat. “What we should worry about is encouraging unproductive, ineffective fiscal policies that are not productive, and ineffective.fHighly and prone to corruption government spending is worsened by government tax reforms. ”
Mr Remolona earlier said the benchmark this year “still some restrictions”, which indicates further reductions this year. He said the tax cuts could be delivered in “baby steps” or 25 bp increments.
