The Bangko Sentral ng Pilipinas (BSP) said sustained hikes in food prices and transport fares, among others, are expected to push further the domestic rate of price increases this month to a range of 5.6% to 6.4%.
BSP, in a statement Friday, said the depreciation of the peso, which is currently trading at the 55-level against the US dollar, is also among the factors seen to further accelerate inflation.
“Lower oil prices, reduction in electricity rates in Meralco-serviced areas, and lower pork prices, meanwhile, are likely to temper in part said price pressures,” it added.
The BSP assured it will closely monitor emerging price developments “to enable timely intervention to arrest emergence of further second-round effects, consistent with BSP’s mandate of price and financial stability.”
Inflation rate in the country continues to post a faster rate after breaching the government’s 2% to 4% target band in April when it jumped to 4.9%. In June, it rose to 6.1%, bringing the average in the first half of the year to 4.4%.
The BSP projects inflation to average at 5% this year, above the target range due mainly to higher oil prices in the international market and the impact of certain commodity supply constraints.