MANILA — The Bangko Sentral ng Pilipinas (BSP) is projecting an even higher inflation rate this month to settle within the range of 4.6 percent to 5.4 percent.
Inflation rate last month stood at 4.5 percent.
“Higher domestic petroleum prices amid geopolitical tensions in the Middle East, as well as the sustained increase in the rice prices present upward price pressures for the month,” the central bank’s Department of Economic Research (DER) said.
However, it noted that it could be “partly offset” by lower electricity rates in areas serviced by the Manila Electric Company (Meralco). Early this month, Meralco announced power rates to go down by PHP0.5436 per kilowatt hour in May due to lower generation and transmission costs.
The DER also cited that lower prices of selected fruits and fish were seen this month as supply conditions of these commodities have normalized. “Going forward, the BSP will remain watchful of evolving price trends and ensure that the monetary policy stance remains appropriate to maintain price stability that is conducive to a balanced and sustainable economic growth,” the DER said.
Last May 10, the Monetary Board hiked policy interest rate by 25 basis points, the first time it raised its rate since September 2014.
Central Bank Governor Nestor Espenilla Jr. said the Monetary Board’s decision to adjust key policy rates upward is a move to temper the current price pressures in the market.
The BSP also hiked its inflation outlook for 2018 from 3.9 percent to 4.6 percent. (PNA)
