The Bangko Sentral ng Pilipinas (BSP) said Friday it expects the May 2024 inflation rate to settle between 3.7 percent and 4.5 percent on higher vegetable and electricity prices and weaker peso.
This represents an increase from 3.8 percent in April, 3.7 percent in March, 3.4 percent in February and 2.8 percent. Inflation settled at 6.1 percent in May 2023, data from the Philippine Statistics Authority show.
The PSA will release the official May 2024 inflation rate next week.
“Continued increases in electricity rates and vegetables prices alongside recent peso depreciation are the primary sources of upward price pressures for the month,” the BSP said in a statement.
Lower prices of rice, fish and fruits as well as domestic oil and LPG could offset the upside price pressures, it said.
“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 decision-making,” it said.
Robert Dan Roces, chief economist of the Security Bank Corp., said inflation rate in May likely settled at 4.0 percent, with a range of 3.6 percent to 4.4 percent.
“We expect slower food price growth, although rice inflation remains a major culprit,” Roces said.
“However, rising utility costs and a weakening Philippine peso, which inflates import prices, will counteract this slowdown. Transportation costs, on the other hand, are projected to offer some relief,” he said.
The government targets an inflation rate of 2 percent to 4 percent this year.
The Monetary Board, the policy-making body of the BSP, kept the overnight borrowing rate at 6.5 percent steady amid the lingering inflationary pressures.
The BSP said it would adopt a quiet period for scheduled monetary policy meeting, when the release of information related to current or prospective monetary policy issues and decisions is limited until the official announcement of the monetary policy decision to the public.
“A quiet period shall be observed seven calendar days prior to the scheduled monetary policy meeting until the announcement of the monetary policy decision to the public,” it said.
The BSP said the governor may speak about the current monetary policy issues or prospective monetary policy decisions during the quiet period, with the concurrence of the majority of the MB directors.
It said the members of the MB, the deputy governors and senior BSP officers would not accept any media interviews or speaking engagements on topics related to current or prospective monetary policy issues and decisions during the quiet period, “unless designated or authorized by the governor, members of the Monetary Board, deputy governors and senior BSP officers.”
