The sustained increase in the prices of local goods and services could breach the 5 percent territory in February 2021, notably higher than the top-end of the government’s 2 to 4 percent target.
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno offered a 4.7 percent outlook for February 2021, stemming from their 4.3 to 5.1 percent forecast range.
Still, the latest inflation range was significantly higher than the 3.3 to 4.1 percent band casted by the regulator month-ago.
“Upward price pressures for the month emanate from the continued uptick in global crude oil prices and elevated fish prices,” Diokno explained.
“Meanwhile, the implementation of the temporary price caps on meat products for NCR (National Capital Region), stable rice prices and lower power rates in Meralco-serviced areas contributed to the downward price pressures during the month,” he added.
According to him, the BSP will remain vigilant and prepared to take on necessary policy actions to ensure the delivery of its primary mandate of price stability.
The BSP’s inflation forecast in January missed slightly with the actual figure hitting 4.2 percent, a notch above its 3.3 to 4.1 percent forecast.
Still, the central bank recognized the recent spike as transitory as supply side shocks mainly drove the higher inflation print in January.
While state economists agree that inflation may accelerate in the coming months, such was expected to correct itself and average within the government’s 2 to 4 percent target for the year.