Uptick in inflation ‘temporary’; likely to taper off in Q2: BSP Gov. Diokno

MANILA – Inflation is likely to exceed the government’s 2 to 4 percent target range in the next few months but is likely to decline in the second half, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said Monday. 

The African Swine Fever, the harvest and fishing seasons, severe weather conditions and the rise in global oil prices will push inflation upwards in the first half of the year, Diokno told ANC.

“We see this episode as temporary as I’ve said, with inflation likely to remain within the government’s 2 to 4 percent target band over the policy horizon,” Diokno saidl

“We feel that for the next few months, we will be exceeding a little bit the upper band of our forecast but it will taper off towards the second half of the year,” added.

Diokno said central bank projected inflation to settle to around 4 percent in 2021 and down to 2.7 percent by 2022.

Inflation in February soared to 4.7 percent due to rising prices of pork meat despite the price cap imposed by President Rodrigo Duterte.

The 26-month high inflation is the highest since January 2019, government data showed. 

Prices of pork surged in the recent months following the shortage in supply due to the ASF outbreak. 

Pork supply has been arriving from Visayas and Mindanao to meet the demand in Luzon, Agriculture Secretary Willam Dar earlier said.