Inflation could settle within 2.8 to 3.6 percent this month due to higher fuel, rice and power prices as well as the weaker peso, the Bangko Sentral ng Pilipinas (BSP) said on Friday.
The rate picked up to 3.1 percent in August from July’s 2.8 percent. Data for September is scheduled to be released on October 5.
Manila Electric Co. has set a P0.8642 per kilowatt-hour increase for the month and just this week oil companies raised pump prices for diesel and kerosene.
The peso, meanwhile, continues to trade within P50-51 per dollar territory and analysts have said it could fall to P52:$1 before the end of the year.
“Nonetheless, the staff’s assessment indicates that average inflation for 2017 will remain within the government’s inflation target of 3 percent plus of minus 1 percentage point,” the Bangko Sentral said.
Monetary authorities, who expect the rise in consumer prices to hit 3.2 percent this year, have cited manageable inflation as reason for maintaining an accommodative policy stance.
The BSP, after lowering its reverse repurchase rate to 3 percent from 4 percent on May 16 last year in the run-up to adopting an interest rate corridor system, has since kept key interest rates unchanged.
Overnight deposit and lending rates also remain at 2.5 percent and 3.5 percent, respectively, while the reserve requirement ratio has been held at 20 percent.
A BSP survey private economists led to a consensus forecast of 3.3 percent for the year, with respondents citing downward pressure from lower global oil prices, low electricity rates, and uncertainty over global economic prospects.