BSP expects inflation to remain high in January

By Lisbet Esmael, CNN Philippines

First Published by CNN Philippines on Jan 31, 2023, 4:54:40 PM

Metro Manila (CNN Philippines, January 31) — Consumer prices may remain elevated this month, with a possibility of even exceeding last month's inflation rate, the Bangko Sentral ng Pilipinas (BSP) said Tuesday.

In a statement, the central bank said it sees the inflation rate to settle within the range of 7.5% to 8.3% this January.

This follows the 8.1% inflation rate recorded in December, which was the highest since November 2008.

"Upward price pressures for the month are expected to emanate from higher electricity rates, approved water rate rebasing, higher domestic petroleum prices, uptick in the prices of key food items, and the annual increase in sin taxes," the BSP said.

But Filipinos might have found relief in January from lower LPG prices and the strengthening of the Philippine peso, which has returned to the ₱54 to the dollar level.

The BSP said it is prepared to "adjust its monetary policy stance at the necessary pace" to temper inflation.

ING Bank senior economist Nicholas Mapa earlier said high inflation could "be sticky over the coming months," which might force the central bank to hike interest rates anew.

The government has kept the inflation target at 2% to 4% for 2023.