RATE ADJUSTMENTS. The Bangko Sentral ng Pilipinas (BSP) says Tuesday (March 7, 2023) it is ready to again adjust its key rates to continue helping address the country's elevated inflation rate. This, even as the rate of inflation rate slowed to 8.6 percent last February from the previous month's 8.7 percent. (PNA file photo)
MANILA – The Bangko Sentral ng Pilipinas (BSP) has reiterated readiness to further adjust its key rates amid the easing of inflation rate in February 2023, citing upside risks from higher domestic and international food prices.
The Philippine Statistics Authority (PSA) on Tuesday reported a slight deceleration in the rate of price increases last February to 8.6 percent from the 14-year high of 8.7 percent in the previous month, although food and energy prices continued to drive the inflation rate.
Last February’s inflation rate is within the BSP’s forecast range of between 8.5 to 9.3 percent and brought the average in the first two months this year to 8.65 percent, way higher than the 2 to 4 percent target band of the government.
“Inflation is projected to remain above the target until early Q4 (fourth quarter) 2023 before decelerating close to the low-end of the target range by January 2024 due mainly to negative base effects and the likely decline in global oil and non-oil prices,” the BSP said, citing supply-side factors both here and abroad.
The central bank said risks to the inflation outlook are still on the upside until next year primarily due to the “potential impact of uncertainties in the global food market, increased domestic prices of key food items facing supply constraints, additional transport fare hikes due to elevated oil prices, and higher-than-expected wage adjustments in 2023.”
These factors are expected to be countered by the results of weaker-than-expected global recovery.
The central bank said its policy-making Monetary Board (MB) “will review its assessment of the inflation outlook in its monetary policy meeting on 23 March 2023,” referring to the second rate setting meeting of the Board for this year.
“The BSP remains prepared to adjust its monetary policy settings as necessary to prevent inflation expectations from becoming disanchored and safeguard the inflation target over the policy horizon. The BSP also continues to call for the timely and effective implementation of non-monetary government measures to mitigate the impact of persistent supply-side pressures on inflation,” it added. (PNA)
