The Bangko Sentral ng Pilipinas (BSP) believes inflation may have already peaked in January 2023.
However, BSP Governor Felipe M. Medalla told reporters on Wednesday that “surprise price shocks” could still happen in the coming months.
The pronouncements made by the central bank governor came a day after the Philippine Statistics Authority (PSA) announced that January inflation reached 8.7 percent, the highest in 15 years.
“It [inflation in January] was actually higher than the high end of our forecast. Most likely [peaked]. Of course, I can’t rule out another surprise supply shock,” Medalla said.
Based on PSA data, core inflation reached 7.4 percent. Core inflation is often considered an indicator of long-term inflation.
Core inflation, which excludes certain highly volatile food and non-food items, posted a 7.4 percent growth.
In January 2022, it was only at 1.8 percent. Core inflation was at 6.9 percent in December 2022.
National Statistician Claire Dennis S. Mapa said this inflation rate was the highest since April 1999 when it hit 7.6 percent.
Mapa said the PSA and BSP recently made changes to the composition of core inflation. The PSA and BSP removed items that had volatile prices comprising 29.6 percent of the weight of items included in headline inflation.
He said some of the items that were removed were cereals, fish, meat, certain vegetables, electricity, diesel, and liquefied hydrocarbons, among others.
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