MANILA - Inflation could settle within the government target this year instead of next year as the vaccination rollout progresses, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said Monday.
The consumer price index could settle at 3.9 percent this year compared to the earlier forecast of 4.2 percent, Diokno told ANC. Inflation for 2022 could be at 3 percent, he said.
The BSP earlier projected inflation to revert to the 2 to 4 percent target range next year.
Diokno said the government is expected to vaccinate at least 50 million by the end of the third quarter. The Philippines is expecting the "wave" of vaccine arrivals and is seen to have "ample supply" to reach its target this year, he said.
Economists have said the vaccination drive could boost consumer confidence.
"I think we’re gaining ground on the vaccination program. We are expecting more supplies I think, unlike other countries, we have multiple sources. We have at least 9 vaccines. We’re not choosy," Diokno said.
"I am very confident that it will be 3.9 average this year and 3 percent next year...The things that are rising are much less than things that are falling below the 3 percent than those who are rising," he added.
Diokno said transport costs, pushed up by health protocols and social distancing rules as well as prices of pork remain as upward price pressures.
Pork meat contributed to higher food prices due to the shortage in supply caused by the African Swine Fever (ASF).
Inflation has been hovering above the target band but it has also been steady at 4.2 percent for the last 3 months.
In terms of the gross domestic product (GDP) growth, the surge of cases in the provinces won't affect the forecast since Metro Manila and the regions III and IV account for 66 percent of the economy, Diokno said.
The economy contracted by 4.2 percent in the first quarter compared to 8.3 percent in the fourth quarter of 2020.
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