Inflation seen settling at 1.9-2.7% in May
THE country’s headline inflation could have eased further to 1.9 percent or picked up to 2.7 percent this month on the back of higher oil and food prices, as well as lower electricity rates, the Bangko Sentral ng Pilipinas (BSP) projected on Friday.
In a Viber message, BSP Governor Benjamin Diokno said the forecast range from the central bank’s Department of Economic Research had a point inflation projection of 2.3 percent, slightly quicker than April’s fivemonth low of 2.2 percent, but slower than the 3.2 percent in May 2019.
The Philippine Statistics Authority (PSA) will release official May inflation data on June 5.
“Higher domestic oil prices, as well as the uptick in the prices of various agricultural products due to supply bottlenecks and the impact of Typhoon ‘ Ambo’ (international name: Vongfong) contributed to positive price pressures during the month,” Diokno explained.
According to the Department of Energy, local oil companies increased the prices of petroleum products — P1.75 a liter for gasoline, P2.10 a liter for diesel, and P2.65 a liter for kerosene — on May 26.
The Department of Agriculture has reported that the agricultural damage wreaked by “Ambo” reached P1.37 billion, affecting high-value crops, rice,
corn and fisheries.
“Meanwhile, the electricity rates in Meralco (Manila Electric Co.)-serviced areas declined during the month despite the reported increase in the total electricity bill due to higher consumption,” Diokno said.
Meralco’s per kilowatt-hour (kWh) rate for households consuming 200 kWh monthly eased by P0.2483 centavos this month.
“Moving forward, the BSP will remain watchful of economic and financial developments, and stand ready to take necessary policy actions to ensure the delivery of its primary mandate of price stability,” Diokno said.
The Bangko Sentral chief said earlier the latest baseline forecasts indicated that consumer price growth could settle at 2 percent this year and 2.5 in the next. Both are at the lower end of the government’s target range of 2 to 4 percent.
The central bank has so far trimmed policy rates by a total of 125 basis points (bps) this year to bring overnight borrowing, lending and deposit rates to 3.25 percent, 3.75 percent and 2.75 percent, respectively.
Its policy- making Monetary Board is set to review these current rates at their fourth policy meeting on June 25.