INFLATION may have spiked to as much as 6.5 percent in June, the Bangko Sentral ng Pilipinas (BSP) said on Thursday, pointing to continued fuel price hikes, higher energy and food costs, and a declining peso.
The rise in consumer prices hit a three-year high of 5.4 percent in April and the BSP, in a statement, said it could have accelerated by 5.7 to 6.5 percent last month.
"[T]he continued increase in domestic oil prices, upward adjustment in electricity rates, higher prices of key food items and peso depreciation are the primary sources of inflationary pressures during the month," it added.
Diesel prices jumped by as much as P6.55 per liter on June 7. Manila Electric Co., meanwhile, increased the cost per kilowatt-hour for the average household by P0.39. The Philippine peso also continued to weaken throughout the month, hitting a low of P55.06 to $1 on June 29.
Cheaper fish and cooking gas prices may have limited the overall rise in inflation, the BSP said.
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In keeping with its price and financial stability mandate, the central bank said it would "continue to monitor closely emerging price developments to enable timely intervention to arrest [the] emergence of further second-round effects."
The BSP's policymaking Monetary Board expects inflation to breach the 2.0- to 4.0-percent target and last week raised its 2022 inflation forecast to 5.0 percent from 4.6 percent.
Monetary authorities have so far ordered two 25-basis-point policy rate hikes in response to rising prices and Felipe Medalla, the new BSP governor, said more aggressive rate hikes could be ordered.
"The moment inflation becomes embedded, it becomes a self-fulfilling prophecy. I expect prices to rise and therefore I will raise my price," he told reporters.
"Well, we're not there yet. So that's why we keep saying that we are data-dependent. And we're interested in the exchange rate only insofar it's a major input to inflation," Medalla added.