MANILA – Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno expects supply side pressures to result in elevated price increases this year as domestic inflation remained at 4.5 percent last month.
Data released by the Philippine Statistics Authority (PSA) showed that average inflation this year also stood at 4.5 percent, higher than the 2-4 percent target band until 2023.
In a Viber message to journalists Wednesday, Diokno said the inflation print last April was within the central bank’s 4.2-5 percent projection for the month.
“The timely approval of the temporary cut in pork import tariff is seen to help address supply constraints and ease price pressures going forward,” he said, referring to the measure targeted to address the impact of the African swine fever on domestic pork supply.
Diokno said inflation expectations are also still well-anchored and the outlook “remains well balanced around the baseline path in 2021, while towards the downside in 2022.”
He added the global health crisis plays as a downside to risks on inflation and growth but “improvements in external demand, as well as continued rollout of the government’s Covid-19 (coronavirus disease 2019) vaccination program and other stimulus measures, will bolster economic recovery.”
In terms of the impact of the latest monthly inflation rate on the BSP’s policy stance, Diokno said the policy-making Monetary Board (MB), which he chairs as the BSP chief, will consider this factor as it reviews the latest developments.
“The BSP remains watchful over the evolving economic conditions and challenges brought about by the pandemic to ensure that the monetary policy remains consistent with its price and financial stability objectives,” he added. (PNA)