MANILA – The Bangko Sentral ng Pilipinas on Friday said the elevated inflation rate has seen to persist towards the end of the year due to upside risks but will likely decelerate in 2023.
“Inflation is projected to remain elevated for the rest of 2022 but will likely decelerate in 2023 due to easing global oil and non-oil prices, negative base effects from transport fare adjustments in 2022, and as the impact of BSP’s cumulative policy rate adjustments take hold on the economy,” BSP said in a press statement.
The central bank said that although the projected outlook is that risks remain on the upside until next year, they “are seen to be broadly balanced for 2024.”
Earlier the Philippine Statistics Authority (PSA) reported another surge in the domestic inflation rate last October when it climbed to 7.7 percent, the highest since December 2008.
Last month’s inflation rate was a little short of a 1 percent jump from September’s 6.9 percent, and 4 percent higher than last year’s, bringing the average inflation to date to 5.4 percent, further exceeding the government’s 2-4 percent target band.
The latest inflation print remains within the central bank’s 7.1-7.9 percent projection.
“The potential impact of higher global non-oil prices, additional transport fare hikes, increased food prices owing to weather disturbances, and a sharp rise in sugar prices, are the major upside risks to the inflation outlook,” it said.
The agency, however, noted that “the impact of a weaker-than-expected global economic recovery is the primary downside risk to the outlook.”
It said these current developments are to be reviewed by its policy-making Monetary Board (MB) during its rate-setting meeting on November 17 to check its impact on monetary policy.
“The BSP remains prepared to take all further monetary policy actions necessary to bring inflation back to the target over the medium term. The BSP also continues to strongly urge the timely implementation of non-monetary government interventions to mitigate the impact of persistent supply-side pressures on inflation,” it added. (PNA)