BSP: “We are aware that inflation is likely to remain elevated in the coming months due mainly to domestic and global supply-side pressures.”
BSP — The Bangko Sentral ng Pilipinas said that the Philippine consumer prices are expected to go up faster than expected in the second half of 2022 given movements in global prices.
BSP Governor Benjamin Diokno said that inflation is seen to settle above the 2% to 4% target range in the 2nd half of this year because of elevated global oil and non-oil prices and positive base effects.
In a virtual briefing, Diokno told reporters that the rise in global crude oil price pressures brought about by the ongoing Ukraine-Russia conflict has contributed to the increase in energy-related prices.
GMA News Online reported that domestic pump prices have been on an uptrend in 12 out of the past 14 weeks, which the Department of Energy (DOE) has repeatedly attributed to the ongoing conflict between Ukraine and Russia that has hit global supplies and driven global prices higher.
“At present, we have not seen clear signs of second-round effects in terms of actual changes in transport fares or wages,” said Diokno.
Last month, the Land Transportation Franchising and Regulatory Board (LTFRB) rejected petitions of transport groups to increase the minimum jeepney fare by P1, which came after successive increases in prices. The LTFRB maintained the minimum fare at P9 for the first 4 kilometers.
Also, the Regional Tripartite Wages and Productivity Board (RTWPB) dismissed the petition of the Trade Union Congress of the Philippines (TUCP) seeking an across-the-board minimum wage increase of PHP 470 a day in Metro Manila.
“We are aware that inflation is likely to remain elevated in the coming months due mainly to domestic and global supply-side pressures. Inflation expectations have likewise risen but they continue to be anchored to the 2% to 4% target band,” Diokno said.
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The central bank expects inflation to average 4.3% in 2022, reflecting the impact of higher global commodity prices, before slowing to the target band within the 1st quarter of 2023.
According to Diokno, the central bank is prepared to act as necessary should they see “stronger indications of second-round effects” such as when they’re already broad-based price pressures, and inflation expectations become disanchored.
The central bank has maintained that monetary policy — currently at record lows — will remain data-dependent moving forward. Based on a report on BusinessWorld Online, the central bank’s next policy meeting is on May 19, 2022.
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