The Bangko Sentral ng Pilipinas on Wednesday projected greater price pressures prevailing in the July inflation survey due next week, likely averaging a low of 4 percent and high of 4.8 percent.
This represents a dim view of the rate at which the price of commodities and goods change from one survey period to the next as monitored by the Philippine Statistics Authority (PSA) given that the last price scan saw inflation averating lower month-on-month in June to 3.7 percent from 3.9 percent in May.
“Higher electricity rates along with the increased prices for agricultural commodities like vegetables, meat, and fruits along with higher domestic oil prices are the primary sources of upward price pressures for the month,” the BSP said in a forecast statement.
But according to the BSP, the above-cited factors are expected to be offset in part by lower rice and fruit prices and the beneficial impact of a weak peso on prices.
Inflation this year started soft at only 2.8 percent in January but steadily climbed and peaked to 3.9 percent in May but subsequently moderated to 3.7 percent in June as housing, utilities and transport rates slowed.
Alcoholic beverages and tobacco, clothing and footwear, furnishings, household equipment and routine maintenance as well as personal care and miscellaneous goods and services similarly moderated during the period.
Core inflation in June, which excludes volatile food and fuel prices, also moderated to 3.1 percent, the lowest in two years.
Going forward, the BSP said it will continue to monitor developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy formulation.
