The upside risks to inflation include adverse weather conditions, expectations of elevated pork prices brought by the African swine fever and the increased demand for other meat products such as chicken.

Inflation, or the sustained increase in prices of goods and services, is seen to manifest within the government’s 2 to 4 percent target, both for this year and the next.

This was learned from the Bangko Sentral ng Pilipinas (BSP) which bared private economists’ forecasts averaging lower than previously anticipated.

“Results of the BSP’s survey of private sector economists in September 2019 showed lower mean inflation forecasts for 2019 and 2020 relative to the results in June 2019,” the report said.

“In particular, the mean inflation forecast for 2019 decreased to 2.7 percent from 2.9 percent in the June 2019 survey. Similarly, the mean inflation forecast for 2020 declined to 3.1 percent during the same review period,” it added.

According to the BSP, surveyed analysts expect inflation “to remain manageable” and lie within the government’s target range.

For 2019, the analysts’ inflation outlook ranges from a low 2.4 percent but no higher than 3.10 percent, or within the government’s target. According to the economists, there is a 90.4 percent probability that inflation would average between the 2 to 4 percent band.

As for the year after, there is an 88.9 percent probability that inflation will hit the target by then. Lowest projection was at 2.2 percent while the highest was set at 4 percent.

The downside risks to inflation include the continued implementation of non-monetary policy action increasing domestic food supply and stabilize prices like the rice tariffication law. Base effects, stable global crude oil prices and lower electricity rate were also seen to contribute to the risk.

The upside risks to inflation include adverse weather conditions, expectations of elevated pork prices brought by the African swine fever and the increased demand for other meat products such as chicken. The potential rebound in global oil prices, weaker peso and the proposed adjustments on oil and sin products such as tobacco and alcohol could offset the decline in inflation.

Previouslyl, BSP Governor Benjamin Diokno announced that headline inflation in the third quarter moderated to 1.7 percent year-on-year versus 3 percent in the previous quarter, which brought year-to-date inflation to only 2.8 percent.

Fourth-quarter inflation was seen to average 2 percent as the rate normalizes in the final two months of the year as the base effects’ impact was seen to dissipate.