The Bangko Sentral ng Pilipinas (BSP) said inflation in May could fall within a range of 1.1 percent – its current level – to 1.9 percent due to higher local oil and food prices.
“The BSP forecast suggests that May inflation could settle wi thin the 1.1 percent to 1.9 percent range,” central bank Governor Amando Tetangco Jr. said in a text message to reporters on Friday.
Inflation remained flat at 1.1 percent in April. Data for May is scheduled to be released by the Philippine Statistics Authority on June 7.
Tetangco said “higher domestic oil prices and the uptick in food prices suggest potential upside inflation pressures, which could be partly offset by lower power rates in Meralco-serviced areas.”
During the month, oil companies raised pump prices of diesel, gasoline and kerosene by P1.00, P1.20 and P1.25 per liter, respectively.
Meanwhile, power rates from Manila Electric Co. (Meralco) decreased by 41 centavos per kilowatt-hour this month with the downward movement in generation, transmission, taxes, and other charges.
The BSP’s May forecast is wel l below the 2 percent to 4 percent target for the year. The central bank has forecast headline inflation to average 2.1 percent this year before inching up to 3.1 percent in 2017.
“Moving forward, the BSP will remain watchful of economic and financial developments to ensure that its primary mandate of price stability conducive to balanced and sustainable economic growth is achieved,” Tetangco said.