Image: Reuters Berita 24 English - Inflation in the Philippines jumped to its highest level in more than three years in May, moving further ...
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| Image: Reuters |
Berita 24 English - Inflation in the Philippines jumped to its highest level in more than three years in May, moving further away from this year's target range of 2% to 4%. This makes it more likely that key interest rates will be raised again later this month.
Benjamin Diokno, governor of the Bangko Sentral ng Pilipinas (BSP), said that inflationary pressures are likely to continue after 2022. He also said that the pace and timing of any future policy actions will be based on the data.
In a statement after the May inflation data came out, he said, "The balance of risks to the inflation outlook now leans toward the upside for both 2022 and 2023."
The consumer price index went up 5.4% last month compared to the same month a year ago. This was the fastest increase since November 2018.
It was the same as what the middle prediction was in a Reuters poll, and it was in the range that the BSP had predicted for the month, which was between 5% and 5.8%. From January to May, the average rate of inflation was 4.1%.
A senior economist at ING, Nicholas Mapa, said in a tweet that price pressures should keep the BSP on the path of raising interest rates.
Mapa said that rates would go up by another 25 basis points. At the policy meeting on June 23, rates could also go up by a more aggressive half a percentage point.
On May 19, the central bank raised key rates by 25 basis points for the first time since 2018. This was part of a global rush to stop rising inflationary pressures.
Diokno has said that there will be another rate hike of 25 basis points at the meeting in June. However, Diokno's replacement thought that there was no need to raise rates quickly because inflation was mostly caused by the higher cost of imports.
Felipe Medalla, who is currently on the BSP's Monetary Board, which makes policy, will replace Diokno as head of the central bank. Diokno will become finance secretary in the new government of President-elect Ferdinand Marcos.
