Prices of basic goods are likely to go through a temporary uptick in the wake of supply disruptions and agricultural damages from Typhoon “Odette,” but inflation is expected to fall within the target range in the next two years, according to the Bangko Sentral ng Pilipinas (BSP).
In a statement, the BSP noted that the 3.6-percent inflation recorded in December was within its forecast range of 3.5 percent to 4.3 percent.
However, full-year inflation was pegged at 4.5 percent, still above the target range of 2 percent to 4 percent.
“Inflation is projected to ease close to the midpoint (meaning 3 percent) of the target range … in 2022 and 2023,” the regulator said.
Regarding the near-term impact of Odette on inflation, the BSP said the effective implementation of nonmonetary government intervention measures to ensure adequate domestic food supply must be sustained in order to mitigate potential supply side pressures on inflation.
“The BSP will include the typhoon’s impact into its projections once firm estimates become available,” the BSP said.
“At the same time, the implementation of reconstruction efforts and rehabilitation programs in areas damaged by the storm will be essential to support economic recovery and prevent job losses,” it added.
Even then, the BSP expressed readiness to maintain its accommodative monetary policy stance to support the economy’s recovery while guarding against any emerging risks to its price and financial stability objectives.