MANILA (UPDATE) - Inflation slowed to 4.8 percent in September, the state statistics bureau said Tuesday.
This was lower compared to the 4.9 percent in August, National Statistician Dennis Mapa said in a virtual briefing.
The government's target range for the year is 2 to 4 percent, while the Bangko Sentral ng Pilipinas' forecast was for inflation to range between 4.8 to 5.6 percent for the month.
The slower inflation for the month was due to slower increase in the transport index but prices could be driven upwards by supply-side factors linked to weather disruptions, global oil prospects, and the continued impact of the African swine fever, SP Gov. Benjamin Diokno said in a statement.
Inflation could remain elevated in the near term before decelerating to within the target by the end of the year, he said.
"The return of inflation to the target range is highly contingent on the successful implementation of these supply measures. The risks to the inflation outlook remain tilted towards the upside for the remaining months of 2021, but remain broadly balanced for 2022 and 2023," Diokno said.
The inflation outlook for 2021 was revised upward to 4.4 percent from 4.1 percent, 3.3 percent from 3.1 percent in 2022 and 3.2 percent from 3.1 percent in 2023 as the economy continued to pick up, BSP Deputy Gov. Francisco Dakila has said.
The BSP has maintained the country's benchmark interest rate, used by banks to price loans, at 2 percent for almost a year now.
Diokno has said that monetary policy will remain accommodative to support economic recovery.
"This was a good number for the BSP, much lower than what even the market was looking at… this gives BSP Gov. Diokno a little more breathing room to keep policy accommodative for as long as he can," ING Philippines senior economist told ANC.
But some analysts said the central bank could tighten monetary policy soon as the economic recovery gains pace.
Former BSP Deputy Governor Diwa Guinigundo said interest rate adjustments would probably be implemented gradually in 25 basis points or 50 bps increments.
-- with reports from Warren De Guzman, Edson Guido and Michelle Ong, ABS-CBN News