Inflation to remain below 4% in 2022 despite oil prices uncertainty–Diokno

BSP Governor Benjamin Diokno

THE Bangko Sentral ng Pilipinas (BSP) said inflation will still fall within their target range for next year despite rising oil prices in the global market.

In a virtual briefing on Friday, BSP governor Benjamin Diokno said they are “closely monitoring” global oil demand and supply conditions in its assessment of the outlook for setting monetary policy. The governor said the latest inflation projections already consider these developments.

BSP estimates showed that energy-related items like petroleum and fuels contributed around 1.5 percentage points to the 4.2-percent November headline inflation.

In its monetary policy setting meeting on Thursday, the BSP revised their inflation outlook to 4.4 percent for this year from 4.3 percent earlier.

For next year, they have also revised their projection upward, from 3.3 percent to 3.4 percent. Despite the upward revision, their latest projection is still within the 2 to 4 percent target range of the government for 2022 and 2023.

Global oil prices have been on an uptrend in 2021 amid recovery in economic activity. However, the emergence of the omicron variant raised concerns over weaker demand prospects and led to the recent decline in global crude oil prices.

“While the recent oil price increase contributed to November inflation being over the BSP’s target band, the implementation of direct non-monetary interventions remains crucial in mitigating cost-push inflation emanating from other commodities,” the governor said.


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