MANILA - Inflation is expected to ease in the coming months as the government implements measures to address supply issues, the Bangko Sentral ng Pilipinas said Thursday.
"With the predominant role of supply-side factors in rising inflation and the effective implementation of non-monetary measures to address these supply-side factors, the BSP expects inflation to decelerate in the coming months," said BSP Governor Benjamin Diokno.
The government's annual inflation target is 2 to 4 percent. Inflation however has remained elevated this year, and has yet to dip below 4 percent, with food and fuel prices remaining high.
But the central bank chief said all forward-looking information on inflation suggests an "eventual deceleration to target over the policy horizon, with the greater part of ongoing price pressures concentrated in a limited set of CPI (consumer price index) components."
"Over the near term, the balance of risks to the inflation outlook appear to be mainly on the upside, but are broadly balanced for 2022 to 2023," Diokno said.
This means the central bank can keep rates low to support economic recovery.
"This outlook provides the BSP with ample room to keep the monetary stance sufficiently accommodative to support the full recovery of the economy.”
Last week, the BSP said it expects October inflation to settle within the 4.5 percent to 5.3 percent range. The Philippine Statistics Authority is set to release October inflation data on Friday, November 5.
Inflation slightly eased to 4.8 percent in September from 4.9 percent in August. The slowest inflation rate was 4 percent, recorded in July.
-With a report from Warren de Guzman, ABS-CBN News