Central bank says August inflation spike caused by “supply-side factors”

September 5, 2018

The Bangko Sentral ng Pilipinas ( BSP) said the spike in August inflation to 6.4 percent "could be attributed to the impact of supply-side factors owing to recent weather disturbances and the continued uncertainty in rice supply."

Energy and transport prices have contributed to the uptick in inflation, said the central bank.

The BSP made this statement ahead of Monetary Board meeting where they will evaluate outlook on prices. The central bank had increased policy rates by a total of one percentage point to control inflation.

The central bank said it continues to "monitor with increased vigilance the evolving outlook for inflation, along with the public’s inflation expectations as well as further evidence of second-round effects, all of which shall be considered closely in  the assessment of the monetary policy stance at the  September 2018 Monetary Board policy meeting."

The central bank "reaffirms its strong commitment and readiness to take all necessary policy actions to address the threat of high inflation and deliver on its primary mandate of price stability."

It also "supports the implementation of Government coordinated non-monetary measures to address the supply-side nature of current inflation pressures.” DMS