THE growth of consumer prices did not tame down, and could have possibly gone up significantly in September, the Bangko Sentral ng Pilipinas (BSP) said on Thursday.
In a virtual press briefing, BSP Governor Benjamin Diokno said their latest inflation assessment shows that inflation could have hit somewhere between 4.8 percent and 5.6 percent in September. The August inflation was at 4.9 percent.
“Inflation will be driven by the upward adjustments in domestic oil prices, Meralco electricity rates, suggested retail prices [SRP] 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 added.
The current eight-month inflation average of the country is at 4.4 percent. If inflation reaches the upper end of the governor’s monthly target, this could rise to 4.5 percent for the nine-month average. The government’s target range for inflation for the year is at 2 to 4 percent.
In its September policy meeting, the BSP said inflation is now expected to average 4.4 percent, representing an upward adjustment from the 4.1-percent forecast in August.
The BSP also said earlier that monthly inflation could hit above 5 percent in September and will still remain elevated in October before falling to within the target range of 2 to 4 percent in November.
With inflation drifting further away from the target band, Diokno vowed to keep a close eye on developments.
“The BSP will 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,” Diokno said on Thursday.
ING Bank economist Nicholas Mapa expressed confidence that despite the recent uptick in inflation, the headline print is widely expected to dip back within target by as early as November as base effects turn favorable.
“With the Central Bank helping support the recovery, we have always expected the eventual policy reversal to take place sometime in the second quarter of 2022, even if inflation by then would have reverted back to target,” Mapa said.
“We expect Diokno to meticulously time the start and pace of the exit strategy to help ensure growth and simultaneously maintain financial stability amidst well-anchored inflation expectations,” he added.