The rate of price increases for December 2020 is seen to remain manageable, with the range seen between 2.9 and 3.7 percent, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said on Tuesday.
In a Viber message to journalists, Diokno said upticks in domestic oil prices along with key agricultural products are projected to push inflation rate for the month higher.
These factors are, however, forecast to be countered by the drop of electricity rates in areas serviced by the Manila Electric Company (Meralco), the decline in domestic rice prices, and the continued strengthening of the peso against the US dollar.
“Looking ahead, the BSP will continue to monitor economic and financial developments to ensure that its primary mandate of price stability conducive to balanced and sustainable economic growth is achieved,” Diokno added.
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.
Average inflation rate in the first 11 months this year stood at 2.6 percent, at the lower half of the government’s 2 to 4 percent-target band until 2024.
BSP’s policy-making Monetary Board (MB) forecasts average inflation this year to be at 2.6 percent while it is seen to be at 3.2 percent in 2021 and 2.9 in 2022.
BSP recently said economic managers consider the inflation target band as “appropriate quantitative representation of the medium-term goal of price stability that is optimal for the Philippines given the current structure of the economy and outlook of macroeconomic conditions over the next few years.”
Inflation print for 2023 to 24 would largely be affected by economic recovery post-pandemic, it added. CURRENTPH