Non-monetary measures needed vs. impact of ‘Odette’ on prices

The effective implementation of non-monetary measures to address the impact of Typhoon Odette on the supply of necessities is the key to thwarting its effect on domestic prices, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said Wednesday.

“As with previous episodes of natural disasters, the effective implementation of non-monetary government intervention measures to ensure adequate domestic food supply must be sustained in order to mitigate potential supply-side pressures on inflation,” he told journalists in a Viber message.

The government disbursed cash assistance to families in areas affected by “Odette”, aside from food packs.

Diokno said the impact of the typhoon, which ravaged parts of Mimaropa, Western Visayas, Central Visayas, Eastern Visayas, Northern Mindanao, and Caraga in the latter part of last year, “will likely result in a temporary uptick in the prices of food items and other necessities over the near term.”

He thus believes that inflation for this and next year will stay near the government’s 2-4 percent target band.

The Philippine Statistics Authority (PSA) on Wednesday reported further deceleration of domestic inflation rate in the last month of 2021 to 3.5 percent from month-ago’s 4.2 percent, bringing the 12-month average to 4.5 percent.

BSP’s December 2021 inflation forecast ranges from 3.5 to 4.3 percent.

Diokno said monetary authorities “will have to include the typhoon’s impact into its projections once firm estimates become available.”

“At the same time, the implementation of reconstruction efforts and rehabilitation programs in areas damaged by the storm will be essential to support economic recovery and prevent job losses,” he said.

He added the central bank “stands ready to maintain its accommodative monetary policy stance to support the economy’s recovery while guarding against any emerging risks to its price and financial stability objectives.”

Source: Philippines News Agency

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