The April 2021 inflation of 4.5 percent was within the BSP’s forecast range of 4.2 – 5.0 percent.
The latest outturn is consistent with expectations that inflation would remain elevated this year, owing to supply-side pressures, before settling close to the midpoint of the target range in 2022.
The timely approval of the temporary cut in pork import tariffs is seen to help address supply constraints and ease price pressures going forward. In addition, inflation expectations remain well-anchored to the inflation target over the policy horizon.
The balance of risks to the inflation outlook remains balanced around the baseline path in 2021, while leaning toward the downside in 2022.
The ongoing pandemic continues to pose downside risks to the inflation outlook and growth prospects.
However, improvements in external demand as well as the continued rollout of the government’s COVID-19 vaccination program and other stimulus measures will bolster economic recovery.
The Monetary Board will consider the latest price developments along with information from the first quarter national income accounts in its review of the monetary policy stance on 13 May 2021.
The BSP remains watchful over the evolving economic conditions and challenges brought about by the pandemic, to ensure that the monetary policy stance remains consistent with its price and financial stability objectives.
