HEADLINE inflation grew sharply in the second quarter as higher food and petroleum prices persisted during the period, the Bangko Sentral ng Pilipinas (BSP) said Friday.
The inflation rate accelerated to 4.4 percent in Q2, after settling at just 2.7 percent in the first quarter of the year, with the central bank attributing the steep increase to food supply issues.
“Food inflation increased largely due to some tightness in domestic supply conditions. Meanwhile, non-food inflation was unchanged as higher inflation for petroleum prices and education was offset by lower inflation for electricity, gas and other fuels as well as rental fees,” the BSP said in a statement.
In a press briefing on Friday, the BSP said the latest forecasts continue to indicate that inflation is likely to settle within the target ranges over the policy horizon.
The central bank is targeting a 3-percent to 5-percent inflation rate for full-year 2014, and 2-percent to 4-percent for 2015.
However, the BSP said the baseline inflation path has also shifted upward mainly due to the higher inflation outturn in May, as well as the inclusion of the potential impact of El Niño on food and utility prices. The monthly headline inflation rate in May climbed to 4.5 percent, its highest level since November 2011, but retreated slightly to 4.4 percent in June.