By Amanda Lee
The Philippine central bank is prepared to take any necessary action to ensure inflation returns to its 3% target, as April's hotter-than-expected price increase reflects risks from the global oil price shock.
"The inflation outlook has deteriorated further amid the ongoing conflict in the Middle East with global oil and fertilizer prices rising considerably in the recent months," Bangko Sentral ng Pilipinas said in a statement late Tuesday.
Headline inflation rose to over a three-year-high of 7.2% in April, higher than March's 4.1% increase.
A broad-based pickup in services inflation suggests that underlying price pressures could be broadening, the BSP said.
Average headline inflation is likely to breach the 4.0% ceiling in 2026 and 2027, it added.
In April, the BSP hiked rates in a preemptive move amid a weaker inflation outlook, and expected inflation to average 6.3% in 2026, before easing to 4.3% in 2027.
Inflation expectations have risen further, heightening the risk of de-anchoring from the 3% target given more persistent inflationary pressures, the BSP said.
Write to Amanda Lee at amanda.lee@wsj.com
(END) Dow Jones Newswires
05-05-26 2307ET
