BSP sees softer inflation in May due to lower prices of gas, poultry and fish

MANILA, Philippines — There’s a likelihood that inflation further slowed in May due to lower pump prices and cheaper poultry and fish, supporting the Bangko Sentral ng Pilipinas’ tightening pause.

In a statement on Wednesday, the BSP said it projects inflation this month to have settled within the range of 5.8-6.6%.

If the lower-end of the forecast range is realized, it would mark a significant easing from the 6.6% price growth recorded in April.

A slower inflation would bring good news to Filipinos who have endured painfully high prices in the past months. For the BSP, the likely easing of inflation would support its decision to hit the pause button on rate adjustments.

READ: BSP slams brakes on rate hikes as inflation slows

The central bank explained that higher prices of rice, vegetables and other key consumer items like LPG were the main drive of inflation this month.

Higher electricity rates by Meralco, the largest power distributor in the country, also contributed to price upticks in May.

But the BSP said the increases were offset by lower oil prices, as well as cheaper poultry and fish. There was also a decrease in electricity rates in areas served by various regional power distributors.

“Going forward, BSP will continue to monitor developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy formulation,” the central bank said.