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MANILA – The rate of price increase for December 2020 is considered to remain manageable, with a range between 2.9 and 3.7 percent, said Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno.
In a Viber message to reporters on Tuesday, Diokno said that increases in domestic oil prices along with key agricultural products are projected to boost the inflation rate for the month.
However, these factors are expected to be offset by the drop in electricity rates in the areas served by the Manila Electric Company (Meralco), the drop in domestic rice prices, and the continued strengthening of the peso against the US dollar.
“Going forward, the BSP will continue to monitor economic and financial developments to ensure that its core mandate of price stability is achieved leading to balanced and sustainable economic growth,” added Diokno.
Last November, inflation posted its fastest phase since February 2019 after it accelerated to 3.3 percent. Inflation in February last year is faster at 3.8 percent, while the December 2019 figure is slower at 2.5 percent.
The average inflation rate in the first 11 months of this year stood at 2.6 percent, in the lower half of the government’s target band of 2 to 4 percent through 2024.
The Monetary Board (MB) of policy-making of the BSP forecasts that average inflation this year will be 2.6 percent, while it is forecast to be 3.2 percent in 2021 and 2.9 in 2022.
BSP recently said that economic managers regard the inflation target band as an “appropriate quantitative representation of the medium-term objective of price stability that is optimal for the Philippines given the current structure of the economy and the outlook for macroeconomic conditions in the coming years. “.
The inflation rate in 2023-24 would be greatly affected by the post-pandemic economic recovery, he added. (PNA)
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