Inflation seen to further rise in May

MANILA -- The Bangko Sentral ng Pilipinas on Thursday, May 31, said the country's inflation rate is projected to further accelerate to a range of 4.6 - 5.4 percent in May as prices of petroleum and rice continue to increase.

The central bank's Department of Economic Research said on social media that the "higher domestic petroleum prices amid geopolitical tensions in the Middle East as well as the sustained increase in rice prices present upward price pressures for the month."

Authorities on May 10 tightened monetary policy after inflation increased to 4.5 percent in April (based on the 2012-based Consumer Price Index series) from 4.3 percent in March, 3.8 percent in February and 3.1 percent in January.

The Monetary Board raised the interest rate on the Bangko Sentral ng Pilipinas' (BSP) overnight reverse repurchase (RRP) facility by 25 basis points to 3.25 percent. Interest rates on overnight lending and deposit facilities were also raised accordingly.

The inflation rate has breached the government's full-year target of 3.0 to 4.0 percent.

Earlier, the Philippine Statistics Authority (PSA) attributed the higher inflation to the implementation of the Tax Reform for Acceleration and Inclusion (Train) law.

In April, the PSA noted higher rates in seven commodity groups, as follows: food and nonalcoholic beverages; alcoholic beverages and tobacco; housing, water, electricity, gas and other fuels; furnishing, household equipment and routine maintenance of the house; health; communication; and restaurant and miscellaneous goods and services.