Bangko Sentral ng Pilipinas Governor Benjamin Diokno said Friday inflation in January likely accelerated to as high as 3.7 percent from 3.5 percent in December on higher prices of fuel and power.
Diokno said in a message to reporters the January inflation likely settled within a range of 3.3 percent to 4.1 percent. The Philippine Statistics Authority will release the official figure next week.
“Higher prices for fuel and meat as well as increased Meralco power rates and excise taxes on alcoholic beverages and tobacco contributed to upward price pressures during the month,” Diokno said.
He said the increases could be partly offset by stable rice prices, lower cost of selected fish and vegetables and the appreciation of the peso.
“The BSP will remain watchful of economic and financial developments to ensure the delivery of its primary mandate of price stability conducive to a balanced and sustainable economic growth,” he said.
The inflation rate averaged 2.6 percent in 2020, slightly faster than 2.5 percent in 2019, as the string of typhoons in the latter part of the year contributed to the uptick in consumer prices.
The policy-setting Monetary Board, in a meeting on Dec. 17, retained the overnight borrowing rate at record low 2 percent because of the benign inflation environment. The interest rates on the overnight deposit and lending facilities were also kept at 1.5 percent and 2.5 percent, respectively.
The interagency Development Budget Coordinating Committee, in consultation with the BSP, retained the inflation target at 2 percent to 4 percent for 2021 and 2022. It also set the inflation target at a range of 2 percent to 4 percent for 2023 and 2024.
The latest BSP forecasts indicated that the inflation would settle within the target range for 2021 to 2022. The BSP said that for 2023 to 2024, inflation would largely be influenced by the pace of economic recovery in the post-pandemic period.
