Bangko Sentral ng Pilipinas Governor Benjamin Diokno said Thursday inflation in September likely breached the 5-percent level and rose to as high as 5.6 percent on rising oil prices and power rates.
Diokno said in an online briefing inflation in September might settle within a range of 4.8 percent to 5.6 percent, compared to 4.9 percent in August.
“Inflation will be driven by the upward adjustments in domestic oil prices, Meralco electricity rates, suggested retail prices of basic necessities and prime commodities and prices of selected fruits and vegetables as well as rice,” Diokno said.
These could be partially offset by the decline in meat prices along with the slight appreciation of the peso, he said. The last time inflation went beyond the 5-percent level was in December 2018 at 5.1 percent.
Diokno said the BSP would continue to monitor emerging price developments to help ensure that its primary mandate of price stability conducive to balanced and sustainable economic growth is achieved.
The Monetary Board of the BSP kept the benchmark policy rate at a record-low of 2 percent last week in support of the economy that is gradually recovering from the impact of the COVID-19 pandemic.
Diokno said the prevailing monetary policy settings remained appropriate given the manageable inflation environment and uncertain growth outlook.
He said latest baseline forecasts indicated a higher inflation path over the policy horizon. He said average inflation was seen to settle slightly above the upper end of the target band of 2 percent to 4 percent in 2021.
Diokno said the risks to the inflation outlook tilted towards the upside for the remaining months of 2021, but remained broadly balanced for 2022 and 2023.
He said earlier the economy showed tentative signs of recovery although the outlook remained uncertain with the lingering impact of the COVID-19 pandemic.