BSP Governor Benjamin Diokno
MANILA – The country’s inflation rate remains manageable despite an uptick to a three-month high last June, with Bangko Sentral ng Pilipinas Governor Benjamin Diokno saying risks remain limited to the impact of the pandemic.
The Philippine Statistics Authority (PSA) reported Tuesday that inflation in the sixth month this year accelerated to 2.5 percent from 2.1 percent last May, primarily due to a faster annual rise in the transport index, specifically of tricycle fares.
The year-ago level was higher at 2.7 percent while average to date stood at 2.5 percent.
In a Viber message to journalists, Diokno said inflation rate last June is within the central bank’s 1.9 percent to 2.7 percent forecast for the month and “is consistent with the BSP’s prevailing assessment that inflation pressures remain limited due largely to the adverse impact of the Covid-19 pandemic on the domestic and global economic conditions.”
He said the latest forecasts by monetary officials point to a benign inflation environment over the policy horizon, with the average inflation this year seen at 2.3 percent, while it is at 2.6 percent for next year and 3 percent for 2022.
Diokno said domestic recovery is seen to be u-shape on a quarterly basis with output likely to contract further in the remaining quarters of 2020.
“Growth is expected to recover in 2021 once the impact of government policy support measures gains traction,” he added.
Meanwhile, Diokno said the outlook for the global economy “has further deteriorated with considerable uncertainty brought about by the magnitude and duration of containment measures across all economies.”
He said the central bank “remains committed to the use of monetary instruments and regulatory relief measures when needed further in fulfillment of its mandate to promote non-inflationary and sustainable growth.”
“The BSP likewise reiterates its support for the health and fiscal programs already being rolled out by the National Government to support the needs of Filipino households and firms amid the pandemic,” he added. (PNA)
