BSP estimates May inflation at 1.6-2.4%

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THE central bank forecasts headline inflation in May to settle within its target range of between 1.6 percent and 2.4 percent as higher oil and sugar prices offset subdued rice prices and power rates.

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Official inflation data will be released by the Philippine Statistics Authority on June 5.

“Forecasts by the BSP [Bangko Sentral ng Pilipinas] suggest that May inflation could settle within a 1.6 percent to 2.4 percent range,” BSP Governor Amando Tetangco Jr. said in a text message to reporters on Wednesday.

Tetangco noted that downward price pressures may come from the reduction in rice prices and power rates.

However, these may be offset by the substantial increase in local pump oil prices as well as higher sugar prices, he added.

In April, headline inflation hit its slowest pace in 20 months at 2.2 percent, lower than the
2.4 percent in March and 4.1 percent in the year-earlier period.

It was the slowest rise since August 2013, when inflation eased to 2.1 percent.

“Going forward, the BSP will continue to keep a watchful eye on the balance of risks in fulfilling its mandate to promote price stability,” Tetangco said.

For full-year 2015, the central bank expects headline inflation to average 2.3 percent, before picking up pace in 2016 at 2.6 percent.

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