It looks like the government is looking for more people to share the blame with.
After blaming uncontrollable world crude prices and thinning rice supply for a surge in consumer prices, the attention of the Department of Finance (DOF) has shifted to a new target.
A Dec. 16 DOF statement now drags market economists and bank analysts for unduly raising inflation expectations, citing “off-the-mark” forecasts given to BusinessWorld ahead of the publication of official data by the Philippine Statistics Authority.
An analysis done by the DOF’s Strategy, Economics and Results Group (SERG) showed absolute deviations of up to 0.4 percentage points from the actual monthly inflation print, or a margin of error of around 15 percent.
“In statistics, forecasts with margins of error above 10 percent are considered weak estimates,” Finance Undersecretary Karl Kendrick Chua said in a statement.
“We did the assessment to see how well analysts are in forecasting inflation and the results show how far off some of them were in their projections. We think that these forecasts have also driven inflation expectations that, as we know from global experience, have a tendency to become self-fulfilling prophecies.”
According to the DOF’s ranking, Alvin Ang from Ateneo de Manila University ranked first in terms of accuracy. He is followed by Angelo Taningco of Security Bank and Michael Ricafort of RCBC.
Former Smokey Mountain singer turned DOF spokesperson Tony Lambino added fuel to the fire and reminded economists about the “negative unintended consequences” of their actions.
“Researchers are taught that early on in college and graduate school. It is an even more crucial lesson when your research is no longer subject to a university’s Institutional Review Board,” Lambino said.
