MANILA, Philippines — Consumer price growth is expected to decelerate further in July, according to the Bangko Sentral ng Pilipinas.
In a statement on Monday, the BSP projected inflation to settle between 4.1-4.9% in July, marking another month of slowing price growth as the domestic economy absorbed the impact of interest rate hikes and easing supply chain disruptions.
The BSP hinged its projection on retreating prices of meat, fruits, fish, LPG price rollbacks, and the peso’s gains in July.
Inflation soared to 14-year highs towards the end of 2022, largely due to supply chain bottlenecks, expensive fuel prices, the domestic economy’s reopening, and the peso’s weakness. To curb this, the BSP injected 425 basis points into the key policy rate to manage consumption and credit growth. Inflation slowed to 5.4% in June.
Interest rates currently stood at 6.25%, as the central bank maintained a rate pause after months of aggressive monetary policy tightening.
That said, the BSP said that higher prices of rice and vegetables and domestic oil prices could push headline inflation to accelerate in July. The BSP projects inflation to land within its 2-4% target by September.
“Going forward, the BSP will continue to monitor developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy formulation,” the statement read. — Ramon Royandoyan