Inflation Likely to Remain Elevated in the Coming Months, BSP Reveals
The central bank of the Republic of the Philippines, Bangko Sentral ng Pilipinas (BSP), through the Monetary Policy Stance online press briefing that went live on February 11, 2021, revealed that inflation is likely to remain elevated in the coming months.
“The monetary board noted that inflation is likely to remain elevated in the coming months, reflecting the impact of supply constraints on domestic prices of key food commodities such as meat and vegetables, as well as the recent uptick in international oil prices,” said Monetary Board Chairman and BSP Governor Benjamin Diokno during the briefing.
Source: Bangko Sentral ng Pilipinas| Official Facebook Page
“The monetary board also noted that inflation expectations continue to be anchored within the inflation target band,” BSP Governor Diokno added.
He also made mention that the “tighter supply of meat products owing in part to the African Swine Fever outbreak in the country could lend further upside pressures on inflation.”
However, according to the BSP Governor, the ongoing pandemic may continue to pose downside risks to demand and to the inflation outlook. “While recent indicators of activity and sentiment have shown some improvement, the emergence of new variants of the virus and possible delays in mass vaccination programs continue to temper prospects for economic recovery and growth,” he added.
“On balance, the Monetary Board is of the view that the manageable inflation outlook continues to allow the BSP to maintain an accommodative policy stance and thus complement crucial fiscal policy measures in supporting economic activity and market confidence,” said BSP Governor Diokno.
“The Monetary Board likewise reiterates its support for urgent and coordinated efforts with government agencies in implementing non-monetary interventions to enable all Filipinos access to internationally competitively priced food and thereby mitigate the impact of supply-side factors on inflation,” Diokno stated.
Source: Bangko Sentral ng Pilipinas| Official Facebook Page
“We had revised the 2021 number to 4.0 percent. In today’s meeting, we are actually revising the baseline for 2022 downwards to 2.7 percent,” said BSP Deputy Governor Dakila.
The BSP Deputy Governor also said that for the next few months, inflation can remain elevated. However, he noted that “inflation is expected to go back within the target range towards the latter part of the year.”
Watch the Full Monetary Policy Stance Press Briefing
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Source: Monetary Policy Stance Press Briefing. 11 Feb. 2021, Philippine News Agency, Reuters
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