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The BSP's Forecasting and Policy Analysis System

Author

Listed:
  • Zeno Ronald R. Abenoja

    (Bangko Sentral ng Pilipinas)

  • Jasmin E. Dacio

    (Bangko Sentral ng Pilipinas)

  • Sarah Jane A. Castañares

    (Bangko Sentral ng Pilipinas)

  • Jan Christopher G. Ocampo

    (Bangko Sentral ng Pilipinas)

  • Mark Rex S. Romaraog

    (Bangko Sentral ng Pilipinas)

Abstract

The Bangko Sentral ng Pilipinas (BSP) subscribes to the Forecasting and Policy Analysis System (FPAS) as the framework for macroeconomic forecasting and analysis in support of monetary policy formulation. FPAS is a standard framework, adopted by many in"ation-targeting central banks, that organizes the generation, consolidation, and analysis of economic information relavant to monetary policy formulation. This paper aims to describe how macroeconomic forecasts and policy simulations are generated to support monetary policy analysis and formulation at the BSP. To this end, this article summarizes the main features of the process involved in generating the baseline forecasts, alternative scenarios, and policy simulations. We highlight the complementary roles played by the BSP’s suite of models and the expert judgement from the sector specialists as well as the importance of forecast communication in the transmission of monetary policy. Finally, we present a systematic evaluation of the forecasting performance of the BSP from 2010 to 2020 together with some of the lessons in forecasting during the COVID-19 pandemic and the recent efforts to improve the BSP’s FPAS.

Suggested Citation

  • Zeno Ronald R. Abenoja & Jasmin E. Dacio & Sarah Jane A. Castañares & Jan Christopher G. Ocampo & Mark Rex S. Romaraog, 2022. "The BSP's Forecasting and Policy Analysis System," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 59(1), pages 77-107, June.
    • Handle: RePEc:phs:prejrn:v:59:y:2022:i:1:p:77-107
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    File URL: https://econ.upd.edu.ph/pre/index.php/pre/article/view/1024/933
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    References listed on IDEAS

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    1. Mr. Philippe D Karam & Mikhail Pranovich & Mr. Jan Vlcek, 2021. "An Extended Quarterly Projection Model: Credit Cycle, Macrofinancial Linkages and Macroprudential Measures: The Case of the Philippines," IMF Working Papers 2021/256, International Monetary Fund.
    2. Mr. Douglas Laxton & Mr. Alasdair Scott & David Rose, 2009. "Developing a Structured Forecasting and Policy Analysis System to Support Inflation-Forecast Targeting (IFT)," IMF Working Papers 2009/065, International Monetary Fund.
    3. Jacob A. Mincer & Victor Zarnowitz, 1969. "The Evaluation of Economic Forecasts," NBER Chapters, in: Economic Forecasts and Expectations: Analysis of Forecasting Behavior and Performance, pages 3-46, National Bureau of Economic Research, Inc.
    4. Jacob A. Mincer, 1969. "Economic Forecasts and Expectations: Analysis of Forecasting Behavior and Performance," NBER Books, National Bureau of Economic Research, Inc, number minc69-1, June.
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    Cited by:

    1. Bank for International Settlements, 2023. "Inflation and labour markets," BIS Papers, Bank for International Settlements, number 142.

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    More about this item

    Keywords

    monetary policy; macroeconomic modelling; forecasting; inflation targeting;
    All these keywords.

    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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