2021-11-17-牛津经济研究院-Philippines_Transitory_inflation_makes_2022_rate_hikes_unlikely_5页_226kb

Analysis Summary

The report states that current inflation in the Philippines is primarily transitory and supply-side driven, based on classifying 94 CPI components into four categories (procyclical, imported, persistent, transitory). The analysis shows that the recent surge is largely due to price increases in food and energy, with food contributing significantly due to supply shocks like weather events, and energy driven by global factors including the pandemic and US Federal Reserve tapering concerns. Core inflationary pressures, specifically procyclical and persistent forces, remain anchored and under control.

Headline inflation is expected to ease in the coming months as temporary factors normalize. As a result, the Bangko Sentral ng Pilipinas (BSP) is expected to maintain current interest rates until Q1 2023 to support an incomplete recovery from the pandemic's economic impact (GDP remains 5.9% below pre-pandemic levels). However, the report notes risks from the US tapering potentially forcing earlier rate hikes to prevent imported inflation.