(PNA file photo)
MANILA – Domestic inflation rate is not seen to exceed 5 percent despite expectations of an elevated inflation rate until around the first half of 2023.
In a virtual briefing on Tuesday, BSP Department of Economic Research (DER) Managing Director Zeno Ronald Abenoja said oil price developments in the international market along with changes in commodities prices are among the factors seen to drive the inflation rate.
“Forecasts do not indicate inflation exceeding 5 percent. It could go towards 5 percent, however, the situation is uncertain,” he said.
During the rate setting meeting of the central bank’s policy-making Monetary Board (MB) last March, the Board hiked the BSP’s average inflation forecast for this year and the next to 4.3 percent and 3.6 percent.
Average inflation projection for this year is already above the government’s 2-4 percent target band until 2023.
These were previously at 3.7 percent and 3.3 percent for 2022 and 2023, respectively.
Inflation rate last March accelerated to 4 percent after staying at 3 percent in the previous two months.
Abenoja said the Board will again evaluate developments during its next rate-setting meeting in May.
He said among the factors that the Board will be looking into are the oil prices in the international market.
He added that while prices are affected by oil price developments, the government continues to implement measures to address supply-side pressures such as higher importation of food items as well as subsidies, which are seen to also prevent second-round effects. (PNA)
