BSP survey plots lower inflation, but US debt crisis unfactored

Private sector analysts and economists scaled down their inflation forecasts for this year and 2012, according to a survey the Bangko Sentral ng Pilipinas (BSP) conducted in June, the results of which were released only on Tuesday. While the survey assumptions factored in a steady supply of oil in the world market and an easing of the debt crisis in Europe following concerted remedies, not included were the effects of the United States’ debt crisis and credit rating downgrade. Thirteen financial institutions revised 2011 inflation forecasts, including a low of 4 percent from Banco de Oro and Bank of Commerce to a high of 5 percent from Metrobank, Goldman Sachs, and Hongkong and Shanghai Banking Corporation. “Mean inflation forecasts… edge lower and remain within the target range," the BSP said. The BSP’s own revised projection charts inflation settling at 4.7 percent this year instead of 5.06 percent, following the Monetary Board’s decision to raise policy interest rates twice by 0.25 percent and then jacking up the reserve requirement to 21 percent. For 2012, the forecasts include Bank of Commerce’s 3.6 percent and Bank of China’s 5.25 percent. — ELR/VS, GMA News