MANILA (UPDATED) - The Bangko Sentral ng Pilipinas on Thursday raised its inflation outlook for the year due to persisting upward price pressures such as higher oil prices, transport fares, as well as the continued meat and fish supply shortage.
Inflation could average 4.6 percent in 2022, higher than the initial forecast of 4.3 percent, said the BSP. This will breach the government's 2 to 4 target range.
The consumer price index is also likely to hit 5 percent in the next few months before easing back next year, BSP Governor Benjamin Diokno said.
"The Monetary Board also observed the emergence of second-round effects, including the higher-than-expected adjustment in minimum wages in some regions. Inflation expectations have likewise risen, highlighting the risk posed by sustained pressures on future wage and price outcomes," he said.
"Given recent developments, inflation could likely exceed 5 percent in the next few months," he added.
The BSP Monetary Board hiked the country's benchmark interest rate, used by banks to price loans, by 25 basis points to 2.25 percent from 2 percent to mitigate the rising prices
Inflation quickened to 4.9 percent in April.
Diokno, however, emphasized that inflation could revert within target range by 2023 "as domestic and global supply pressure ease."
BSP's Department of Economic Research (DER) said average inflation could settle at 3.7 percent next year.
— with reports from Jessica Fenol and Warren De Guzman, ABS CBN News