Bangko Sentral pegs May inflation at 2.8%-3.6%
MANILA, Philippines — Inflation likely remained tame in May although higher transportation cost and prices of some food items provided upward price pressures within the month, the Bangko Sentral ng Pilipinas said Friday.
In a statement, the BSP Department of Economic Research said it expects inflation to settle within 2.8%-3.6% range in May.
If the lower end of the BSP’s forecast range is realized, this would fall below the 3% recorded in April and would stay within the central bank’s 2%-4% target range.
“Upside price pressures could emanate from the jeepney fare adjustment in Central Visayas and higher prices of selected food items. Positive base effects could also account for temporary price pressures in May,” the BSP said.
“Meanwhile, lower rice and domestic oil prices alongside downward adjustment in electricity rates are seen to help temper inflation for the month,” it added.
Year-to-date, price growth averaged 3.6%, well within the BSP’s annual target.
In a bid to power growth amid benign inflation and tight liquidity conditions, the BSP this month cut its benchmark rate by 25 basis points to 4.5% from a decade-high of 4.75%. It also announced a three-step reduction in bank reserves from 18% to 16%.
READ: BSP announces phased cuts in bank reserves | BSP cuts policy rate amid benign inflation, slow Q1 GDP growth
“Looking ahead, the BSP will continue to be watchful of evolving price trends to ensure that the monetary policy stance remains consistent with maintaining price stability,” the central bank said.
The government will release the official inflation data for May on June 6. — Ian Nicolas Cigaral
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