The normalization of pork supply via temporary tariff cut on imported pork could lower local inflation rate.
Inflation rate was steady at 4.5 percent in May, according to the Bangko Sentral ng Pilipinas (BSP).
BSP Governor Benjamin Diokno said last month’s inflation print is within their 4 percent to 4.8 percent projection for the month and is in line with their expectations of an elevated rate during the quarter because of pork supply constraints and high oil prices.
However, Diokno reiterated monetary authorities’ forecast of inflation deceleration to within the 2 percent to 4 percent target band starting in the second half of the year until 2022 once supply stabilizes.
“The implementation of the temporary reduction in tariffs on imported pork is seen to address supply constraints and ease price pressures on meat products going forward. Thus, the projected decline of inflation depends crucially on the timely arrival of pork to help stabilize domestic prices,” he said.
With the rate of price increases steady for the third consecutive month last May, average inflation to date stood at 4.4 percent.