The Bangko Sentral ng Pilipinas (BSP) said the 8.1% inflation rate recorded for December 2022 could be the worst for this recent series of price spikes, but warned that it’s unlikely for prices to sharply go down soon.
Inflation rose further from November’s 8%.
“This is consistent with the assessment of elevated inflation could peak in December 2022 before decelerating in the succeeding months due to easing global oil and non-oil prices, negative base effects, and as the impact of BSP’s cumulative policy rate adjustments work its way to the economy,” the BSP said Thursday.
However, the central bank said there is a greater chance that inflation will stay high in 2023.
“The expected upside risks to inflation over the policy horizon stem mainly from elevated international food prices due to high fertilizer prices and supply chain constraints,” it added. “On the domestic front, trade restrictions, increased prices of fruits and vegetables due to weather disturbances, higher sugar prices, pending petitions for transport fare hikes, as well as potential wage adjustments in 2023 could push inflation upwards.”
The BSP has been raising interest rates to pull inflation down to its original 2-4% target.