Versus 1.2% in June; downward pressure seen from lower oil prices, power rates
The central bank expects headline inflation to settle within its projected range for July of 0.5 percent to 1.3 percent, based on the estimated impact of lower petroleum pump prices and power rates on the consumer price index.
That compares with 1.2 percent recorded in June, the sharpest drop in two decades.
The official inflation report for July is due for release by the Philippine Statistics Authority (PSA) on August 5.
“Following the significant deceleration in inflation in June, the BSP’s forecasts suggest July inflation could remain low and settle within the 0.5 percent to 1.3 percent range,” Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said in a text message to reporters on Monday.
The central bank’s inflation estimate for July stands below the full-year target range between 2 percent and 4 percent set by the Development Budget Coordination Committee.
Tetangco pointed to the downward pressure that could come from lower local pump prices of petroleum and power rates for the month.
Oil firms implemented four oil price rollbacks during the month. Last week, they reduced diesel prices by 50 centavos per liter and 20 centavos per liter for gasoline and kerosene prices.
In terms of power rates, household electric bills will be reduced by P0.225 centavos per kilowatthour (kWh) this month, according to Manila Electric Co.
For residential customers with a monthly consumption of 200 kWh, their electricity bills for July will drop by P4.50. For those consuming 300 kWh, the reduction will be P19.14; P41.83 for 400 kWh; and P88.89 for 500 kWh.
Tetangco added his usual: “The BSP will continue to monitor domestic and global developments to ensure that the policy stance remains supportive of price stability conducive to a balanced and sustainable economic growth.”
In June, headline inflation recorded its sharpest drop in two decades at 1.2 percent, decelerating from 1.6 percent in May and 4.4 percent in the year-earlier period. It was the slowest rise since 1995.
For full-year 2015, the central bank expects headline inflation to average 2.1 percent, before picking up pace to 2.5 percent in 2016. Private analysts have revised downward their 2015 inflation forecast to 2.3 percent from a previous projection of 2.7 percent.