Diokno Confident- Inflation Seen Peaking In Q2

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said Thursday that the inflation rate will reach its peak in the second quarter months of April to June and that so far, there is limited evidence of second-round effects.

- Lee C. Chipongian

“With the ongoing health crisis, demand-side price pressures are mostly subdued,” said Diokno. “These are tempered, in large part, by moderately high unemployment, spare manufacturing capacity and subdued activity in lending and investments.”

Based on the BSP’s latest inflation outlook assessment, inflation is projected to rise above the high-end of the two-four percent target in the first half of 2021 with the peak expected in the second quarter due to the transitory impact of supply-side price pressures as well as positive base effects, according to Diokno.

He reiterated that inflation is still expected to decelerate below the mid-point of the two-four percent target range by the fourth quarter of this year and in the first quarter of 2022 due to negative base effects, before settling close to the midpoint by the second half of 2022.