MANILA — Bangko Sentral ng Pilipinas Governor Eli Remolona said the government is monitoring potential risks to inflation such as the El Niño and its impact on rice traders, including Vietnam.

Inflation eased for the sixth straight month to 4.7 percent in July.

However, the price of rice has been rising and the commodity was identified as a potential source of inflation in the coming months, according to National Statistician Dennis Mapa.

• Traders cutting rice imports amid high prices abroad

In a briefing with the Department of Finance on Friday, Remolona cited India’s rice export ban but he said he is more concerned with any future actions by Vietnam.

Vietnam is a significant source of imported rice for the Philippines.

“We’re more worried about Vietnam. Vietnam is number one… El Niño is beginning to hit Vietnam. Medyo 'yun ang mas worrisome,” said the BSP governor.

The government is also implementing several interventions to mitigate inflation like intensifying the proper utilization of calamity fund and quick response fund, expediting measures to mitigate the impact of El Niño, and the timely importation and facilitation of rice imports arrival.

Remolona said these non-monetary policy interventions may also lessen the need for more tightening.

The BSP earlier hiked interest rates to temper inflation which hit a high of 8.7 percent in January. The country’s benchmark policy rate was kept at 6.25 percent.

When asked what could be the possible move of the Monetary Board in its next policy-setting meeting, Remolona assured the public that it would be “data-driven.”

The new BSP governor, who replaced Felipe Medalla in July, will join his first Monetary Board policy meeting on Aug. 17.

“We will analyze what the data says. How far the tightening has worked for the economy, how far it weakened demand in the economy. Tinitingnan namin lahat yun,” said Remolona.

• PH needs 3.7 pct average inflation in next 5 months to hit BSP’s 5.5 pct forecast for 2023