Series of price cuts to jazz up mart
Lower fuel costs would ease prices of other affected goods and services
A recent series of rollbacks in fuel prices would help ease inflationary pressure which would ease market jitters, an economist said over the weekend.
“Lower fuel costs would ease prices of other affected goods and services. It would also lead to reduction in the oil bill, thereby provide some support on the peso exchange rate,” Rizal Commercial Banking Corp. chief economist Michael Ricafort told Daily Tribune.
The surprise 75 basis points policy rate hike to 3.25 percent effective 14 July was meant to support or at least stabilize the peso exchange rate, as part of the toolkit related to the exchange rate vis-a-vis the inflation-targeting framework since 2002 and the price stability mandate.
Moreover, the economist said this would also help better manage both actual inflation and price expectations.
2% to 4% inflation
Earlier, the Bangko Sentral ng Pilipinas (BSP) said the decision of the Monetary Board was based on assessment that inflation was projected to breach the upper end of the 2 percent to 4 percent target range for 2022 at 5 percent and 2023 at 4.2 percent. Inflation is seen to subsequently soften to 3.3 percent in 2024.
It said the inflation projections further shifted higher since the May 2022 monetary policy meeting, indicating that elevated pressures could persist over the policy horizon.
Moreover, another positive development is expected with another oil price rollback scheduled on Tuesday.
The oil price projection ranges from a P1 to P1.80 reduction for diesel, 50 centavos or no adjustment for gasoline and up to P1 per liter for kerosene.