Decisive monetary action...

apparent that strong domestic demand," he added, "is making it too convenient for producers and traders to pass on higher costs and possibly more to consumers."

The BSP is holding its sixth Monetary Board policy meeting for the year this month, on September 27. Espenilla said they will be looking more closely at the latest data to reassess the medium-term inflation path.

During its August 9 policy stance meeting, the BSP raised its 2018 inflation forecast from 4.5 percent to 4.9 percent and its 2019 forecast to 3.7 percent from 3.3 percent. For 2020, it had a 3.2 percent inflation estimate. Both the 2019 and 2020 inflation are the rates the BSP is trying to protect now and to keep it within the two-four percent target.

Espenilla said they will evaluate and assess “appropriate recommendations” for its September 27 meeting. “We also need to consider external developments and US Fed actions to the extent these exert undue pressure on the peso,” he emphasized. “Under the circumstances, we will weigh the need for further monetary policy action.”