MANILA - The Bangko Sentral ng Pilipinas on Thursday revised upward its inflation forecast for 2021 and 2022 following supply-side constraints that are likely to be felt until the third quarter.
Inflation forecast for 2021 is at 4.2 percent, breaching the government target of 2 to 4 percent range, BSP Deputy Governor Francisco Dakila said in a virtual press conference.
For 2022, inflation forecast was raised to 2.8 percent from 2.7 percent, he said.
The BSP projected that "inflation will remain above the high end of the target range until the third quarter of this year," Dakila said.
"Inflation is still seen to return within the target band in 2022 as supply-side influences subside," the central bank said in a separate statement.
Two main factors in the revision are the the elevated inflation outturn in February, where inflation reached 4.7 percent, and the outlook in the international oil prices.
Dakila, however, emphasized that the upward trend in inflation remains "transitory."
BSP Governor Benjamin Diokno earlier said inflation remains manageable.
On its Thursday meeting, the Monetary Board kept the benchmark interest rate unchanged.
The BSP has the tools and the scope for further actions if needed to support the economy, BDO Unibank chief strategy officer Jonas Ravelas told ANC.
However, Ravelas said the BSP has done the heavy-lifting in 2020 and that the government need to actually spend to buoy the economy.