MANILA, July 29 — A ranking official of the Bangko Sentral ng Pilipinas (BSP) said rate of price increases in the country may have reached its peak this 2017 after decelerating in May and June.
BSP Deputy Governor Diwa Guinigundo told reporters Friday that monetary officials still consider the possibility that inflation will still rise until around August at about 3.4 percent level.
He, however, said that the situation is “still iffy given (that) the decline in oil prices and commodity prices in general have been moderate.”
“It may have likely peaked already when it hit 3.4 percent,” he said.
Highest inflation level this year stood at 3.4 percent last March and April.
Last May, inflation declined to 3.1 percent and to 2.8 percent the following month.
To date, rate of price increases averaged at 3.1 percent, slightly above the mid-point of the central bank’s two to four percent target for 2017 until 2020.
Last June, BSP’s policy-making Monetary Board (MB) cut the central bank’s average inflation forecast for this year to 3.1 percent from 3.4 percent on account of the expected lower path of inflation, robust domestic economic growth, liquidity and credit conditions that remain supportive of growth, and improving global economic prospects.
The Board, however, maintained its three percent average inflation forecast for 2018.
Guinigundo said latest assessment on trend of inflation is for a manageable environment since movement of oil and food prices are expected to remain steady.
He said domestic rice supply is not a problem since the government is expecting the arrival of additional rice importation, which will further be helped by the 805,000 metric tons (MT) allowed under the minimum access volume (MAV) scheme.
Rice accounts for about nine percent of total consumer basket and with rice prices not expected to exert any inflation pressure, Guinigundo remains positive of manageable inflation environment.
“There’s nothing at this point that can upset the path of inflation at this point,” he said.
“In general, we should have some stability in oil prices, therefore the path of inflation toward the rest of the year will remain basically stable,” he added. (Joann Santiago/PNA)