By Benjamin Cuaresma
MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) expects inflation to remain elevated in July, warning that higher fuel prices, rising electricity rates, and a weaker peso continued to drive consumer prices higher despite the easing cost of several essential food commodities.
In its latest monthly inflation assessment, the central bank projected that July inflation would likely settle within a range of 5.6 percent to 6.6 percent, keeping inflation well above its medium-term target of 3 percent. Should inflation reach the upper end of the forecast, it would exceed the 6.4 percent recorded in June.
The BSP said the country’s inflation outlook was largely shaped by higher domestic petroleum prices fueled by ongoing geopolitical tensions in the Middle East, as well as increased electricity charges that added pressure on household expenses.
The central bank also cited higher fish prices and the continued depreciation of the peso against the strengthening US dollar as factors that contributed to rising costs of goods and services during the month.
“Upside price pressures during the month could stem from elevated domestic petroleum pump prices, higher electricity rates, increasing fish prices, and the depreciation of the peso against the strengthening US dollar,” the BSP said.
Despite these inflationary pressures, the monetary authority noted that lower prices of staple food products helped prevent a sharper increase in overall consumer prices.
According to the BSP, declines in the prices of rice, meat, vegetables, and fruits provided some relief to households and partially offset the impact of higher energy costs.
“These pressures are expected to be mitigated by lower prices of key food commodities, including rice, meat, vegetables, and fruits,” it said.
The inflation forecast comes as the government continues implementing measures aimed at cushioning consumers from volatile global oil prices while monitoring developments in international markets that could further influence domestic prices.
The Philippine Statistics Authority is scheduled to release the official July inflation data on Aug. 5, with the figures expected to provide a clearer picture of the country’s price environment and help shape expectations for future monetary policy decisions.
The BSP has maintained that while inflationary pressures remain significant, it will continue to closely monitor domestic and external risks to ensure that price growth gradually returns to a level consistent with sustainable economic expansion and long-term price stability.
ia/xf
