BSP: Inflation could have topped 5% in June

MANILA, Philippines — The overall increase in prices of key consumer items likely soared above 5 percent in June, the Bangko Sentral ng Pilipinas said Friday.

In a statement, the BSP’s Department of Economic Research said it expects inflation to settle within 4.3-5.1 percent in June. Inflation spiked to a fresh five-year high of 4.6 percent in May, putting the year-to-date figure to 4.1 percent or above the BSP’s 2-4 percent target range.

“Upward price pressures from rice and other agricultural commodities due to weather-related disruptions, as well as the increase in LPG prices could be partly tempered by the reduction in fuel prices and electricity rates in Meralco-serviced areas,” the central bank unit said.

“Going forward, the BSP will continue to keep a watchful eye on the risks to the inflation outlook to help ensure price stability conducive to a balanced and sustainable growth of the economy,” it added.

At its fourth policy review for the year, the BSP’s monetary board on June 20 decided to hike policy settings by 25 basis points following a similar move last May in a bid to cool down inflation. But some analysts say more rate hikes are necessary to counter rising commodity prices.

Central bank Governor Nestor Espenilla has admitted that the BSP will likely miss its inflation target this year, but he assured the public that monetary authorities will “try” to hit its goal next year.

Citing a slowdown in inflation momentum, the BSP decided to trim its inflation forecasts to 4.5 percent from the previous estimate of 4.6 percent for 2018, and to 3.3 percent from 3.4 percent for next year.

The BSP likewise expects inflation to peak in the third quarter of 2018, or “earlier” than its previous projection.

The government will release the June inflation data on July 5.