The International Monetary Fund (IMF) upgraded the economic growth forecast for the Philippines this year to 6.2 percent mainly due to likely decreasing inflation.

“Disinflation has advanced throughout the region, albeit at different speeds — in some. It is at or close to central bank targets in emerging markets and Japan,” IMF Director of Asia and Pacific Krishna Srinivasan said Tuesday.

The 6.2 percent projection is better by a 0.3 percentage point than the level the IMF estimated last October.

Last year, the Philippine economy grew by 5.6 percent due to strong private consumption and a downtrend in inflation, according to the Philippine Statistics Authority.

The country’s average inflation stood at 3.3 percent as of March this year, government data show.

March inflation rose to 3.7 percent from February’s 3.4 percent and January’s 2.8 percent.

However, all the figures fell within the 2 to 4 percent target band of the Bangko Sentral ng Pilipinas (BSP).

BSP April inflation projection

The BSP projects the April inflation to stay close to its target at 3.5 to 4.3 percent due to likely higher prices of certain food items.

“Continued price increases for rice and meat along with higher gasoline prices and the peso depreciation are the primary sources of upward price pressures for the month,” BSP said.

However, it added prices of other commodities might remain relatively cheaper which could restrain inflation near the low end of the BSP’s target range.

“Meanwhile, lower prices of fish, fruits, vegetables as well as lower electricity rates and the rollback in LPG prices could offset the upside price pressures,” BSP said.

Instances of peso depreciation were seen after the US Federal Reserve chairman Jerome Powell indicated a high interest rate for a long period, raising demand for dollar-denominated investments and strengthening the greenback.

Asia’s robust labor markets

Srinivasan said Asia’s robust labor markets and multiple infrastructure projects, in general, signal economic growth.