In observance of the Holy Week, the Philippine News Agency’s online news service will be off on March 29, Good Friday, and March 30, Black Saturday. Normal operations will resume on March 31, Easter Sunday.

— The Editors

BSP guards vs. risks to inflation as pandemic lingers

By Joann Villanueva

August 5, 2021, 2:48 pm

<p>BSP Governor Benjamin Diokno</p>

BSP Governor Benjamin Diokno

MANILA – The Bangko Sentral ng Pilipinas (BSP) will remain on guard against challenges posed by the coronavirus pandemic to keep the country’s inflation rate within the target band.   
 
In a Viber message to journalists on Thursday, BSP Governor Benjamin Diokno said the increases in commodity prices in the international market due to supply-chain factors and the recovery in global demand are upside risks to domestic inflation.
 
But these risks are expected to be countered by the emergence of new coronavirus disease 2019 (Covid-19) variants and delays in easing lockdown measures, he said.
 
“The BSP remains watchful over the evolving economic conditions and challenges brought about by the pandemic to ensure that the monetary policy stance remains consistent with its price and financial stability objectives,” he added.
 
The country’s inflation rate decelerated further to 4 percent in July from the previous month’s 4.1 percent.
 
Last month’s figure brings the seven-month average to 4.4 percent, which is still above the government’s 2 percent to 4-percent target band.
 
Diokno said last month’s inflation rate is within the central bank’s 3.9 percent to 4.7 percent forecast range.
 
He said this is in line with monetary authorities’ projection that inflation will remain near the upper-end of the target band until the third quarter, and slow further to within-target range before the end of the year “as the impact of government supply side measures take effect.”
 
He said inflation is expected to stay at the midpoint of the target band from 2022 to 2023.
 
“The continued implementation of direct non-monetary interventions to ease supply constraints remain crucial in tempering inflation pressures,” he added.
 
Diokno said the latest inflation report and the second-quarter gross domestic product report, which the Philippine Statistics Authority is scheduled to release on Aug. 10, will be among the factors that will be assessed by the central bank’s policy-making Monetary Board during its rate setting meet on Aug. 12. (PNA)
 
 

Comments