The rate of price increases in the country posted a further uptick to 3.5 percent in December 2020 but Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said this remains transitory given the recent weather disturbances.
Last month’s inflation print is higher than the previous month’s 3.3 percent.
In a Viber message to journalists Tuesday, Diokno said average inflation in 2020 stood at 2.6 percent, within the government’s 2 to 4 percent target band until 2024.
“The BSP continues to expect inflation to settle within the target range over the policy horizon,” he said.
Diokno said risks to the domestic inflation rate in the coming months “continue to lean toward the downside owing mainly to the continued uncertainty caused by the pandemic on domestic and global economic activity.”
“Nevertheless, upside risks emanate from the possibility of an early rollout of Covid-19 (coronavirus disease 2019) vaccines in the Philippines, which is expected to ease the existing lockdown measures and expand further operating capacity of the economy,” he said.
Diokno said the rollout of vaccines in other countries is also expected to result in a stronger-than-expected global economic recovery, and this “could present upward price pressures on global oil and food prices.”
“The BSP stands ready to deploy its full arsenal of instruments as needed in fulfillment of its mandate to maintain price and financial stability conducive to sustainable economic growth,” he added
Source: Philippines News agency