BSP: Fuel price hikes unlikely to disrupt inflation trajectory

The Bangko Sentral ng Pilipinas (BSP) believes that recent fuel price hikes are unlikely to disrupt the current inflation trajectory.

Despite global oil prices being on an uptrend this year, concerns over weaker demand due to the Omicron variant have led to a decline in crude oil prices recently.

Petroleum and fuels contributed 1.5 percentage points to November's 4.2% inflation rate.

BSP Governor Benjamin Diokno stated that while headline inflation is above target, core inflation remains within the government’s 2 percent to 4 percent range.

The central bank has revised its average inflation forecasts for this year and next year upwards due to developments in global oil prices.

Diokno noted potential upside risks such as second-round effects of elevated oil prices and proposed jeepney fare hikes, while cautioning that the impact of suspending petroleum excise tax would be temporary.