The Bangko Sentral ng Pilipinas (BSP) will no longer release monthly inflation forecasts and just focus on the path of consumer prices two years ahead.
On Thursday, Bangko Sentral Governor Espenilla Jr. declined reporters’ request for BSP’s inflation forecast for the month of July, saying that monthly projection is not a BSP policy focus.
The official July headline inflation rate data is scheduled to be released by the Philippines Statistics Authority on August 4.
Before Espenilla took over as the new BSP governor on July 3, the central bank has been providing its monthly inflation rate forecast.
“Our focus is on the inflation path two years ahead,” Espenilla told reporters.
With its primary objective to promote price stability conducive to a balanced and sustainable growth of the economy, the central bank adopted the inflation targeting framework in January 2002.
Inflation targeting focuses on achieving slow and stable inflation that supports the economic growth objective. The approach entails announcing an explicit inflation target that the BSP promises to achieve over a given period.
The Bangko Sentral said in its latest inflation report that baseline forecasts show that inflation would likely settle near the midpoint of the government’s target range of 2 percent to 4 percent in 2017 to 2019.
It expected inflation to peak in the third quarter of 2017, driven by positive base effects and domestic economic activity before reverting back to the midpoint of the target range in 2018 to 2019.
“The risks to future inflation remain tilted toward the upside. The impact of the government’s fiscal reform program and the pending petitions for adjustments in electricity rates are the main upside risks to inflation,” it said.
Uncertainty in the global economic landscape continues to be the main downside risk to inflation, it added.