BSP sees temporary inflation spike

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno believes the 3.3 percent inflation rate in November, the highest in 17 months, is only temporary.

The November inflation exceeded the BSP's target band of 2.4 to 3.2 percent, primarily due to higher prices in food and non-alcoholic beverages, as well as alcoholic beverages and tobacco.

Diokno projects that average inflation over the next two years will remain within the BSP's 2-4 percent target band, as the effects of typhoon-related supply disruptions are expected to be short-lived.

Despite positive news on COVID-19 vaccines, global and domestic economic risks remain on the downside, necessitating the addressing of logistical challenges for vaccine distribution to support recovery.

The resurgence of COVID-19 infections in various parts of the world could further dampen economic recovery if lockdowns are re-implemented.

The BSP remains prepared to utilize its available tools to maintain price and financial stability, which are crucial for sustainable economic growth and employment.

An economist from RCBC also believes the November inflation spike is temporary and linked to the impact of recent typhoons, suggesting it may limit further monetary easing by the BSP for now.