BSP projects January 2024 inflation between 2.8% to 3.6%
MANILA, Philippines — Bangko Sentral ng Pilipinas sees the country’s inflation rate for January 2024 between 2.8% to 3.6%.
The central bank’s prediction of the inflation rate is a slight decline to the 3.9% inflation print in December 2023.
The BSP said that the “primary sources” that could drive inflation upward are the depreciation of the peso and the increase of prices in agricultural items, petroleum, electricity and water prices.
“Higher prices of some agricultural items, like rice, meat, fruits, and fish, along with increased petroleum prices, electricity and water rates, annual adjustment in sin taxes, and the depreciation of the peso are the primary sources of upward price pressures for the month,” the central bank said in a press release.
For the month of January, oil companies observed four-consecutive weeks of oil price hikes.
In the same month, electric concessionaire Meralco slightly increased their power rates due to the uptick of generation charges of the Wholesale Electricity Spot Market and Independent Power Producers.
It could also be recalled that water concessionaires Maynilad and Manila Water implemented a rate hike this month approved by the Metropolitan Waterworks and Sewerage System last December.
Agricultural products such as special rice, meanwhile, increased by P70 per kilo from P68 per kilo.
The local premium rice hit a peak retail price of P67 per kilogram, while the well-milled rice was priced at P57 per kilogram and the regular local rice was available at P53 per kilogram.
The central bank also attributed the possible pace of inflation to the law-mandated annual increase of sin tax on some products.
Vegetables, sugar may lessen uptick threats
BSP said that vegetable and sugar prices could mitigate upward inflation pressures.
“Meanwhile, lower prices of vegetables and sugar could contribute to downward price pressures,” the BSP said.
Vegetables, like cabbage, carrots and Baguio beans, saw a price glut due to oversupply in certain regions.
Sugar prices in Metro Manila, meanwhile, have little to no price movement, according to the Sugar Regulatory Commission’s latest data.
On January 26, BSP Gov. Eli Remolona said that the central bank will have “more room” for a rate hike if the economy picks up in the last quarter of 2023.
However, he said that BSP, which has raised policy rates to 450 basis points since May 2022, will stay “hawkish” despite easing inflation and possible rate cuts.
The central bank’s first rate-setting meeting for 2024 is scheduled on February 15.
- Latest
- Trending
