Philippines: BSP expects inflation burden to lighten in April

MANILA, Philippines — Consumer price growth is projected to have eased in April, as the Bangko Sentral ng Pilipinas observed energy costs and some food costs soften earlier this month.

In a statement on Friday, the BSP expected inflation to settle between 6.3-7.1% in April. Even if the upper-range of the forecast is realized, this would build a stronger case for price growth decelerating. 

Inflation hit 7.6% year-on-year in March, slower compared to the outturn in the preceding month. The BSP has already exhausted monetary policy efforts, injecting 425 basis points into borrowing costs despite inflation fueled by supply chain disruptions. That said, the central bank is expecting some price softening within these items.

“Lower electricity rates, the decline in prices of fish and vegetables, and rollback in LPG prices contributed to easing price pressures during the month,” the BSP said.

On the other hand, the central bank expects expensive rice, meat, fuel prices, and the peso’s weakness to moderate the projected softening of inflation in April.

“Going forward, the BSP remains prepared to respond appropriately to continuing inflation risks in line with its data-dependent approach to monetary policy formulation,” the central bank added. — Ramon Royandoyan