BSP: June inflation could go either way
INFLATION could accelerate further this month or slow from May’s five-year high, the Bangko Sentral ng Pilipinas (BSP) said on Friday.
“The BSP Department of Economic Research projects the 2012-based June 2018 inflation to settle within the 4.3-5.1 percent range,” the central bank said in a statement.
“Upward price pressures from rice and other agricultural commodities due to weather-related disruptions as well as the increase in LPG (liquefied petroleum gas) prices could be partly tempered by the reduction in fuel prices and electricity rates in Meralco-serviced areas,” it added.
The rise in consumer prices has topped the BSP’s 2.0-4.0 target for the year since March, hitting 4.6 percent in May.
Official inflation data for June will be announced on July 5.
Tropical depression “Domeng” triggered flash floods in some areas in the country in the first week of the month, which followed by monsoon rains over Luzon during the succeeding week.
Philippine Statistics Authority data showed that rice prices continued to increase as of the second week of June, with the average wholesale price of well-milled rice up 0.05 percent from the previous week at P41.37 per kilo. Retail prices were also up 0.02 percent week on week at P44.13/kg.
LPG prices, meanwhile, increased by P3 to P4 per kilogram or P33 to P44 per 11-kg cylinder in the first week of the month.
Oil companies, on the other hand, implemented a hefty price rollback in the prices of diesel, gasoline, and kerosene, announcing P0.90 to over P1-peso per liter adjustments.
Manila Electric Co.’s per kilowatt-hour rate for households consuming 200 kWh per month, meanwhile, decreased by P0.1252 in June.
“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,” the central bank said.
Economic managers have kept the inflation target at 2.0-4.0 percent for the next three years, declaring that “social programs and measures are expected to mitigate second-round effects” from possible minimum wage adjustments and fare hikes.
The Bangko Sentral’s policymaking Monetary Board in June raised key interest rates for the second time this year, noting the need for “follow-through” action to address inflation, after an increase in May.
The fresh 25-basis point adjustment brought the central bank’s overnight borrowing, lending and deposit rates to 3.5 percent, 4.0 percent and 3.0 percent, respectively.
The Monetary Board, however, trimmed its inflation forecasts for 2018 and 2019 to 4.5 percent and 3.3 percent, respectively, from 4.6 percent and 3.4 percent previously.
The post BSP: June inflation could go either way appeared first on The Manila Times Online.