BSP: Inflation could hit eight-month high in July

Inflation is expected to have accelerated and could possibly have breached the government’s target this month due to higher electricity rates and food prices among others, the Bangko Sentral ng Pilipinas (BSP) said Wednesday.

The central bank projects inflation, which measures the rate of increase in the prices of goods and services, to settle within the range of 4.0% to 4.8%, which compares with the 3.7% in June, and the 4.7% in July 2023.

This could be the highest in at least eight months since the 3.9% in December 2023. Should it clock in at 4.8%, it would be the highest in nine months since the 4.1% in November last year.

“Higher electricity rates along with the increased prices for agricultural commodities like vegetables, meat, and fruits along with higher domestic oil prices are the primary sources of upward price pressures for the month,” the BSP said in a statement.

“These factors are expected to be offset in part by lower rice and fruit prices along with the peso appreciation,” it added.

The Manila Electric Company (Meralco) hiked its rates by P2.1495 per kilowatt-hour (kWh) in July, bringing the overall rate for a typical household to P11.6012 per kWh, translating to an increase of around P430 for residential customers consuming 200 kWh.

Prices of rice in Metro Manila, meanwhile, ranged from P45.00 to P61.00 per kilogram for local commercial rice and from P47.00 to P65.00 per kilogram for imported commercial rice as of July 30, based on data from the Department of Agriculture’s (DA) monitoring.

Prices of local commercial rice ranged from P45.00 to P65.00 per kilogram for local commercial rice, and from P49.00 to P65.00 per kilogram for imported commercial rice on July 1, 2024.

Meanwhile, the Philippine peso closed at P58.645:$1 on July 30, stronger than the finish of P58.65:$1 on July 1, 2024.

“Going forward, the 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 BSP said. — RSJ, GMA Integrated News