BSP: Inflation seen hitting 5.6-6.4% in July

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Metro Manila (CNN Philippines, July 29) — The Bangko Sentral ng Pilipinas (BSP) said it expects inflation—or the rate of increase in prices of goods—to range between 5.6% and 6.4% this July.

“Inflation for the month was driven by the continued increase in food prices, further transport fare hikes, and peso depreciation. Meanwhile, lower oil prices, reduction in electricity rates in Meralco-serviced areas, and lower pork prices are likely to temper in part said price pressures,” the BSP said in a statement.

The latest forecast range is slightly slower than the 5.7-6.5% band projected in June.

That month, inflation hit a nearly four-year high of 6.1%. This brought the year-to-date figure to 4.4% - further above the BSP's 2-4% full-year target band.

“Looking ahead, the BSP will continue to monitor closely emerging price developments to enable timely intervention to arrest emergence of further second-round effects, consistent with BSP’s mandate of price and financial stability,” it added.

The central bank earlier said policy actions in the coming months will be done “commensurate” to its main objective of ensuring inflation won't remain entrenched. 

BSP Governor Felipe Medalla told reporters on Friday that the annual average forecasts of 4.2% for next year and 3.3% for 2024 will soon be lowered, citing factors like the general easing of oil futures. However, he did not reveal exactly how much the revisions would be.