Global commodity prices drive inflation surge in the Philippines, requiring urgent action.
In 2018, inflation in the Philippines increased due to both supply and demand factors. Global commodity prices played a big role in driving up inflation, while non-oil trade deficits also contributed. Tighter monetary policy was needed to control inflation. The widening trade deficits suggested a larger demand pressure than initially thought. Delaying monetary policy adjustments can lead to higher inflation rates and require more drastic interest rate hikes to bring inflation back down.