The Bangko Sentral ng Pilipinas (BSP) hiked oil prices and their impact on power rates and some commodities may push the domestic inflation rate for April 2022 between 4.2 to 5 percent.
Another price pressure source in the previous month is the positive base effect, referring to the 4.5% inflation rate in April last year.
In a statement last Friday, BSP said “higher electricity rates in Meralco-serviced areas, increased domestic petroleum prices, as well as higher meat and fish prices, are the primary sources of inflationary pressures during the month.”
It noted, however, that the positive base effects “could be offset in part by lower prices of fruits and vegetables and the broadly stable peso.”
Looking ahead, it added, “BSP will continue to monitor emerging price developments and possible second-round effects to help achieve its primary mandate of price stability that is conducive to balanced and sustainable growth of the economy.”
Given the upticks in the prices of oil and some commodities in the international market, monetary authorities forecast an acceleration of inflation.
During its rate-setting meet in March, the Monetary Board, BSP’s policy-making body, hiked its average inflation forecast this year to 4.3% from 3.7% and the 2023 forecast to 3.6% from 3.3%.
Price increases accelerated to 4% in March from the previous month’s 3%. Average inflation in the first quarter this year stood at 3.4%, still within the government’s 2-4% target band.