UPDATE 1-Philippines inflation stable in April, but still above c.bank target

* April CPI at +4.5% yr/yr, unchanged from March

* Core CPI eases to 3.3% from 3.5% in March

* Cbank to review policy settings on May 13 (Adds detail, comments from central bank and economist)

MANILA, May 5 (Reuters) – Philippine inflation steadied to an annual rate of 4.5% in April, as slower price increases for key food items such as rice and vegetables offset higher energy costs, data from the statistics agency showed on Wednesday.

April inflation was unchanged from March and below the median forecast of 4.7% in a Reuters poll and within the central bank’s 4.2%-5.0% projected range for the month.

Core inflation, which excludes volatile food and fuel prices, eased to 3.3% in April, after a 3.5% reading in March .

Headline inflation averaged 4.5% in the first four months of the year, above the central bank’s 2%-4% target band for the year.

The Philippine central bank said the data was in line with its projection that inflation would remain elevated this year, particularly due to pressures from high pork prices after African swine fever outbreaks reduced supply.

“The balance of risks to the inflation outlook remains balanced around the baseline path in 2021, while leaning toward the downside in 2022,” Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno told reporters.

The BSP, which reviews monetary settings every six weeks, holds its next policy meeting on May 13, two days after the release of first-quarter gross domestic product data.

Diokno said the BSP’s decision will take into account the latest inflation data, along with information from the first-quarter GDP report.

“We expect BSP to remain on hold for the whole of 2021 to provide support to the economy and we believe inflation will begin to decelerate further in May as supply side issues are addressed by supply side remedies,” said Nicholas Antonio Mapa, a senior economist at ING.

The government has reduced pork import tariffs and allowed traders to bring in higher volumes of meat from abroad in a bid to address the domestic shortage.

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