MANILA – The deceleration of the domestic inflation rate, which is steady at 4.5 percent in May, depends on the normalization of pork supply with the help of the temporary tariff cut on imported pork.
According to Bangko Sentral ng Pilipinas (BSP) governor Benjamin Diokno, last month’s inflation print is within their four percent to 4.8 percent projection for the month. It is also in line with their expectations of an elevated rate during the quarter because of pork supply constraints and high oil prices.
He, however, reiterated monetary authorities’ forecast of inflation deceleration to within two percent to four percent target band starting in the second half of the year until 2022 once supply stabilizes.
“The implementation of the temporary reduction in tariffs on imported pork is seen to address supply constraints and ease price pressures on meat products going forward. Thus, the projected decline of inflation depends crucially on the timely arrival of pork to help stabilize domestic prices,” he said.
With the rate of price increases steady for the third consecutive month in May, average inflation to date stood at 4.4 percent.
Monetary authorities projected inflation to average at 3.9 percent this year.
The BSP official said the latest inflation development will be among the factors the policy-making Monetary Board will consider during its rate-setting meet on June 24.(PNA)
