The Bangko Sentral ng Pilipinas (BSP) sees inflation remaining elevated between 7.5 and 8.3 percent this month, well above the two to four percent target, after hitting a 14-year high of 8.1 percent in December.
The BSP said upward price pressures for the month were to emanate from higher electricity rates, approved water rate rebasing, higher domestic petroleum prices, uptick in the prices of key food items, and the annual increase in sin taxes.
On the other hand, the central bank said that the reduction in LPG prices as well as the peso appreciation could contribute to easing price pressures.
“The BSP will continue to adjust its monetary policy stance at the necessary pace to prevent the further broadening of price pressures and monitor emerging price developments closely in accordance with the BSP’s price stability mandate,” it said.
Inflation accelerated to 5.8 percent in 2022, well above the central bank’s two to four percent target, from 3.9 percent in 2021.
The BSP Monetary Board sees inflation easing to 4.5 percent this year, still above the government’s target range, and further to 2.8 percent next year.
The central bank is seen further raising key policy rates this year to bring inflation down to within the target range and reanchor inflation expectations.
The Monetary Board raised interest rates by 350 basis points to a 14-year high of 5.50 percent last year from an all-time low of two percent.
