May inflation to settle at 2.2%- 3.1%

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The Bangko Sentral ng Pilipinas (BSP) on Monday said that inflation this month likely settled at the lower end of the 3-percent to 5-percent full year target.

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In a text message, BSP Governor Amando Tetangco said that May inflation rate could be at 2.2 percent to 3.1 percent.

Tetangco explained that higher prices of oil, selected food items, and tuition were the possible factors that pushed up the inflation rate.

“Moving forward, the BSP will continue to closely monitor domestic developments, especially pending petitions for power rates, and the impact of capital flows on the financial markets,” he also stated.

Earlier, the BSP announced that the inflation path continues to track the lower half of the target range for 2013 to 2014.

It also said that full-year inflation is expected at 3.2 percent from the previous projection of 3.3 percent.

The central bank also revealed that external risks particularly, the uncertainty over the strength of the global economy and the relative firmness of the peso, were the key downside risks to the broad outlook for prices.

It noted that power rate adjustments and the possibility of a sustained surge in liquidity owing to strong capital inflows could push inflation higher as well in 2014, which could range to 3.3-percent to 3.4-percent.

Mayvelin U. Caraballo

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