MANILA, Philippines — Consumer prices likely continued their uptick beyond government expectations in February, creating a bid headache for a government grappling to revive the economy from a pandemic-led crash.
Inflation could potentially settle between 4.3%-5.1% year-on-year this month, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said in a Viber message to reporters on Friday.
If realized, this would be the second month that inflation soared above the BSP's 2-4% annual target. Worse, the low-end of the central bank's forecast range is faster than 4.2% uptick recorded in January, which was a 2-year high.
The official inflation data for February will be out on March
"Upward price pressure for the month emanate from the continued uptick in global crude oil prices and elevated fish prices," Diokno said.
"Meanwhile, the implementation of the temporary price caps on meat products for NCR, stable rice prices, and lower power rates in Meralco-serviced areas contributed to the downward price pressures during the month," he added.
At their first meeting for the year, the BSP's Monetary board kept the key rate at a record-low of 2%, which appears to balance the need to keep a weakened economy liquid while avoiding to fan inflation.
Diokno maintains that quickening inflation is "transitory" and that prices are now expected to remain “elevated” in the next few months. Yet ultimately, he said inflation should settle within the 2-4% target this year. It will, as per BSP’s latest forecast, but only to hit the ceiling of 4% by yearend.
"Looking ahead, the BSP stands ready to take necessary policy actions to ensure the delivery of its primary mandate of price stability conductive to a balanced and sustainable economic growth," Diokno said.