BSP expects higher inflation rate of 4.7% in February – Manila Bulletin

The Bangko Sentral ng Pilipinas (BSP) projects that inflation will rise to 4.7 percent in February from 4.2 percent in January.

BSP Governor Benjamin E. Diokno said the forecast range is from a low of 4.3 percent to a high of 5.1 percent for that month.

Diokno, citing the BSP Department of Economic Research, said that the inflation projection of 4.7 percentage points for February is due to the higher world oil price.

The BSP said that the upward pressure on prices was due to “continued rise in world crude oil prices and high fish prices”, while temporary high prices for meat products in the national capital region that includes Metro Manila, as well as “stable rice prices and lower electricity rates in the areas served by Meralco” also eased price pressures in February.

The BSP has said that high inflation is temporary in nature and comes mainly from supply shocks.

Diokno said last week that the central bank was still balancing accommodative policy and financial stability in the wake of a supply-driven spike in inflation in oil and meat prices since January. They don’t think it’s demand-driven yet, as the economy has yet to recover.

To keep monetary policy stable, Diokno told a forum on Friday that the BSP “will remain vigilant about current inflation dynamics and the operating environment with a forward-looking perspective to ensure that the monetary policy stance continues to support the economic recovery. and address any risks to our price stability mandate. “

The inflation rate surpassed the target of two to four percent in January due to the recovery in world oil prices, bad weather and the outbreak of African swine fever. Still, Diokno said there was limited evidence of second-round effects, such as increases in wages and transportation fees.

In 2020, the first year of the pandemic, inflation was set at 2.6 percent, which was within the target range of two to four percent.