Central bank sees prices easing in Q4

Luz Wendy T. Noble

,

Reporter

The Philippine central bank expects consumer price increases to slow in the coming months as meat prices go down.

Meat prices, which contributed to faster inflation in the past months, have eased, Bangko Sentral ng Pilipinas ng Pilipinas (BSP) Governor Benjamin E. Diokno told a televised news briefing on Friday. Meat inflation slowed to 15.6% in September from 22.1% in May.

“It could still slow down because of our programs that allow higher pork imports and lowering the tariff for these products,” he said in Filipino.

Mr. Diokno said food inflation had remained elevated in the past months because of low fish, vegetables, and meat supply caused by typhoons and an African swine fever outbreak.

Inflation eased to 4.8% in September from 4.9% a month earlier, though still above the central bank’s 2-4% target this year.

BSP expects inflation to hit 4.4% this year before easing to 3.3% and 3.2% in 2022 and 2023. Mr. Diokno said they expect improving supply conditions next year to help them hit their inflation target.

Inflation in 2022 may benefit from favorable base effects this year, Nicholas Antonio T. Mapa, a senior economist at ING Bank-NV Manila said in a note.

“Should cost-side remedies to the supply side shocks finally work their way through, we can expect at least some price pressures to fade in the quarters ahead,” he said. “Nonmonetary measures are most effective against cost side inflation as they directly address the issue of supply.”