Philippines inflation expected to stay within target in 2024

A ranking central bank official on Wednesday said assessments on inflation show that the 2024 level is not expected to breach the government’s 2-4 percent target band despite the rising global oil prices, according to a report by Philippine News Agency.

During the Davao City-leg of the Philippine Economic Briefing, which was streamed live through the Bangko Sentral ng Pilipinas’ (BSP) Facebook page, BSP Deputy Governor Francisco Dakila Jr. said amid the latest oil price upticks in the global market, which is also being felt in the domestic setting, “we have a quite good margin for oil.”

“Our simulation shows that we have a threshold of about USD100 per barrel for oil before oil will breach our inflation target for next year. So far, we’re at the USD80 per barrel range,” he said.

Data show that global oil prices rose anew on Tuesday, with Brent crude rising by 83 cents to USD86.17 per barrel and the West Texas Intermediate (WTI) by 98 cents to USD82.92 per barrel.

Oil prices have a big impact on the rate of price increases since it has affected even the prices of other commodities.

Amid the latest developments on oil prices, Dakila said monetary authorities continue to see the monthly inflation rate returning to within-target levels in the last quarter of the year.

After hitting its 14-year high of 8.7 percent last January, the domestic inflation rate sustained its slowdown to 4.7 percent last July, bringing the seven-month average to 6.8 percent.

BSP forecasts inflation to average 5.4 percent this year and around 2.9 percent in 2024.

“In fact, there’s a great chance that inflation will be touching close to or even slightly below the lower level of the target by the first quarter of next year and that is largely because of base effects,” Dakila said.