Inflation rate likely rose to 1.4 percent in May from 1.1 percent in April, on higher food prices, according to the Finance Department.
This would mark the 13th straight month that inflation rate settled below 2 percent since April 2015, when it averaged 2.2 percent.
Finance undersecretary and chief economist Gil Beltran said in an internal economic bulletin risks to inflation included the increase in food prices, particularly vegetables.
Beltran, however, said the May inflation forecast would still be slower than the 1.6-percent price increase registered in the same month last year.
“The below-target forecast can be traced to comparatively lower fuel and electricity prices that the country still enjoys,” Beltran said.
Electricity rate at the franchise area of Manila Electric Co. in May was about 15 percent lower than a year ago.
Beltran said diesel prices also went down by 15.1 percent to an average of P26.40 per liter in May from the same period last year.
“This low rate allows room for monetary policy to sustain rapid economic growth,” Beltran said.
Bangko Sentral ng Pilipinas earlier estimated that inflation in May settled within a range of 1.1 percent to 1.9 percent.
“The BSP forecast suggests that May inflation could settle within the 1.1 percent to 1.9 percent range,” Bangko Sentral Governor Amando Tetangco Jr. said in a text message to reporters last week.
Tetangco said “higher domestic oil prices and the uptick in food prices suggest potential upside inflation pressures, which could be partly offset by lower power rates in Meralco-serviced areas.”
The Finance Department’s forecast remained below the 2 percent to 4 percent target for the year. Bangko Sentral said inflation was expected to average 2.1 percent in 2016, before rising to 3.1 percent in 2017.
