Inflation rate likely picked up in August from 4.7 percent in July on higher prices of fuel and rice, the Bangko Sentral ng Pilipinas said Thursday.
It said in a statement the August inflation might have settled within a range of 4.8 percent to 5.6 percent. The Philippine Statistics Authority will release the official August inflation next week.
“Higher prices of rice and other agricultural commodities due to weather disturbances, sharp rise in fuel prices as well as increased transport costs owing to higher train fares and toll rates, and the peso depreciation are the primary sources of upward price pressures in August,” the BSP said.
Meanwhile, lower electricity rates from major providers could contribute to downward price pressures for the month, the BSP said.
Data from the Philippine Statistics Authority showed that inflation in July eased to a 16-month low of 4.7 percent from 5.4 percent in June, pulled down by slower year-on-year increase in housing, water, electricity, gas and other fuels at 4.5 percent from 5.6 percent.
This was the sixth consecutive month of deceleration in the headline inflation and the lowest since March 2022’s inflation of 4 percent.
The July 2023 inflation was also slower than 6.4 percent a year ago. It brought the average inflation in the first seven months to 6.8 percent, higher than the 2023 target range of 2 percent to 4 percent.
Bangko Sentral ng Pilipinas Governor Eli Remolona earlier said there was still room for local monetary authorities to increase the prevailing interest rates, if needed, without contracting the economy.
Remolona said the third pause of the Monetary Board last Aug. 17, 2023 was a “prudent” move but the BSP remained ready to hike if the upside risks materialized.
He particularly said the softness in the second-quarter GDP of 4.3 percent, a slowdown from 6.4 percent in the first quarter.
Data showed that from a peak of 8.7 percent in January 2023, inflation eased in the succeeding months and further to a 16-month low of 4.7 percent in July 2023.
The BSP raised the policy rate by a total of 425 basis points to 6.25 percent between May 2022 and March 2023, before taking a prudent pause in the last three Monetary Board meetings, amid the sustained easing of inflation.