THE Bangko Sentral ng Pilipinas (BSP) expects June inflation to record the same rate or even lower than May’s 6.1 percent.
In its month-ahead forecast, the BSP said inflation could settle within the range of 5.3 to 6.1 percent. Inflation was also at 6.1 percent in June 2022.
BSP said food and oil prices are still high, and the depreciation of the peso could cause prices to rise but other commodities such as meat and vegetables could keep inflation low or at the same rate last month.
“Going forward, BSP will continue to monitor developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy formulation,” the BSP said in a statement issued on Friday.
Prices of key food items, such as rice, vegetables, and fish, along with the increase of domestic oil prices and electricity rates, as well as the depreciation of the peso are the primary sources of upward price pressures in June.
The lower prices of meat and fruits as well as the rollback in LPG prices could contribute to downward price pressures during the month.
The Philippine Statistics Authority (PSA) said the slowdown of inflation to 6.1 percent in May marked the fourth consecutive month of deceleration in headline inflation in the country.
Despite the decline, the inflation rate in May 2022 was still lower at 5.4 percent. The year-to-date average inflation rate, that is from January to May 2023, stood at 7.5 percent.
The BSP earlier said it stands ready to resume its monetary policy tightening should the country’s domestic conditions warrant such a move.
This is despite the recent decision of the United States Federal Reserve to pause its monetary policy tightening stance. The Federal Open Market Committee (FOMC) earlier decided to maintain the target range for the federal funds rate at 5 to 5.25 percent.
In the Philippine Economic Briefing (PEB) in Singapore aired live on social media, BSP Deputy Governor Francisco G. Dakila Jr. said the monetary policy actions of the Federal Reserve now carry less weight on the policy actions of the Monetary Board.
Image credits: Patrick Roque via Wikimedia Commons CC BY-SA 4.0