The Bangko Sentral ng Pilipinas said Thursday inflation rate in May likely hit as high as 5.4 percent based on the 2012 price index, faster than 4.5 percent in April, on the back of higher petroleum and rice prices.
The Bangko Sentral said in a statement the May 2018 inflation likely settled within a range of 4.6 percent to 5.4 percent.
“Higher domestic petroleum prices amid geopolitical tensions in the Middle East as well as the sustained increase in rice prices present upward price pressures for the month,” it said.
The Bangko Sentral said these price pressures could be partly offset by lower electricity rates in areas served by Manila Electric Co. along with lower prices of selected fruits and fish items as supply conditions stabilized last month.
“Going forward, the BSP will remain watchful of evolving price trends and ensure that the monetary policy stance remains appropriate to maintain price stability that is conducive to a balanced and sustainable economic growth,” it said.
Inflation in April climbed to a five-year high of 4.5 percent, bringing the first four months’ average to 4 percent, representing the upper limit of the 2018 target range of 2 percent to 4 percent.
The Finance Department said the implementation of the Tax Reform for Acceleration and Inclusion law that took effect in January this year was not the only reason for the faster inflation.
Finance Undersecretary Karl Kendrick Chua said a spike in rice prices because of alleged lack of supply, a weak peso, rising oil prices abroad, better tax compliance of local cigarettes and growing consumer demand accounted for the bulk of the 4.5 percent inflation in April.
“Inflation rose mainly because of local and global factors. Train accounted for only 0.4 percentage points of the 4.5 percent. In other words, if you could buy items for P100 last year, you need to spend P104.50 now for them and of that increase, only 0.40 was due to Train,” Chua said.