Calling inflation's peak, BSP says prices likely soared higher in December
MANILA, Philippines — Boiling consumer price growth likely got hotter for Filipino consumers in December, in what the Bangko Sentral ng Pilipinas expects to be the peak of red-hot inflation that has been straining household budgets for most of the year.
In a statement on Thursday, the BSP projected inflation would land between 7.8-8.6% in December. This means this month’s reading could beat the 8% print recorded in November.
“Upward price pressures for the month are expected to emanate from higher electricity rates, uptick in the prices of agricultural commodities, elevated meat and fish products, and higher LPG prices,” the central bank said.
The BSP, however, expects declining local pump and rice prices, as well as the peso’s relative gains, to temper the inflation outturn in December.
The rising inflation trend in the past months was partly propelled by an explosion in consumer demand, brought about by the domestic economy’s reopening in the second quarter. This, while supply problems believed to be a byproduct of the pandemic persist.
Despite this, BSP Governor Felipe Medalla said that the BSP forecasts inflation to peak in December, after a surprising inflation outturn in November that was the highest in 14 years.
The BSP projected inflation would slow down in 2023.
Economic managers also forecast inflation would average 5.8% in 2022, conceding that the Philippines already missed its 2-4% annual inflation target.
“The BSP continues to monitor closely emerging price developments to enable timely intervention that could help prevent the further broadening of price pressures, in accordance with the BSP’s price stability mandate,” the BSP said.
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