The central bank sees headline inflation in August settling within its projected range of 0.2 percent to 1 percent, given the downtrend in power rates and petroleum pump prices.
That compares with the 20-year low 0.8 percent recorded in July.
The Philippine Statistics Authority (PSA) is releasing inflation figures for August on September 4.
“August inflation could be within the 0.2 percent to 1.0 percent range as continued downward adjustments in power rates and domestic oil prices could temper inflation for the month. Base effects could also be at play,” Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said in a text message to reporters on Thursday.
The inflation estimates stand below the full-year target of 2 percent to 4 percent set by the Development Budget Coordination Committee.
For August, the Manila Electric Co. announced a P0.26 per kilowatt-hour (kWh) drop in residential rates. This brought the total reduction to P1.56 per kWh over the past four months.
This mean s that a household consuming 200 kWh a month will be billed P52 lower in August.
In the second week of August, the country’s oil firms lower pump prices for the eighth consecutive week by as much as P1 per liter. The prices of kerosene were lowered by P1 per liter, while prices of gasoline and diesel were reduced by P0.45 per liter.
In July, the headline inflation hit its slowest pace in 20 years at 0.8 percent from 1.2 percent in June and 4.9 percent in the year-earlier period. It was the slowest rise since 1995.
For the full-year 2015, the central bank expects a headline inflation average of 1.8 percent.
“For next year, however, we see inflation moving up to within target,” Tetangco said, referring to the BSP’s average inflation forecast of 2.5 percent for 2016.