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The Bangko Sentral ng Pilipinas (BSP) Governor Benjamine Diokno on Friday said stabilization of pork and transport costs, strong peso and stable banking sector are clear signs of economic recovery following the drag due to the COVID-19 pandemic.

Inflation may continue to decline through the rest of the year as meat prices start to stabilize with ample supply, and as elevated transport costs start to normalize, Diokno said during a televised briefing with Palace Spokesperson Harry Roque.

The consumer price index rose 4.8 percent in September, slower compared to the 4.9 percent in August. 

Inflation could settle at 4.4 percent for 2021, or above the 2 to 4 percent target range, but it is expected to settle within the mid-range of the target band in 2022 and 2023, Diokno said.

“Ang inaasahan namin patuloy na pagbaba ng inflation hanggang matapos ang taon,” Diokno said.

The banking system is expected to remain stable with adequate buffers, so is the peso, which is supported by strong dollar remittances from overseas Filipinos, the business process outsourcing sector, and inflow from foreign direct investments, he said.

To support the economy, the BSP kept the country’s key borrowing rate at 2 percent for 7 consecutive monetary policy meetings. 

The gross domestic product grew 11.8 percent in the second quarter. Businesses, meanwhile, are anticipating a pick-up in consumer spending in the 4th quarter due to the Christmas holidays.