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Philippines: June inflation likely quickened to 5.7-6.5%
MANILA, Philippines — The rise in consumer prices likely quickened further, with inflation accelerating to a range of 5.7 to 6.5 percent in June from 5.4 percent in May, according to the Bangko Sentral ng Pilipinas (BSP).
Finance Secretary and former BSP governor Benjamin Diokno cited the continued increase in domestic oil prices, upward adjustment in electricity rates, higher prices of key food items and peso depreciation as the primary sources of inflationary pressures last month.
The upside risks, Diokno said, were likely offset in part by the lower prices of liquefied petroleum gas and fish.
“Looking ahead, the BSP will continue to monitor closely emerging price developments to enable timely intervention to arrest emergence of further second-round effects, consistent with BSP’s mandate of price and financial stability,” the new secretary of the Department of Finance and Monetary Board member said.
The last time inflation stayed above 5.7 percent was in November 2018 and in October 2018 at 6.9 percent.
Inflation quickened to 5.4 percent in May, the highest in more than three years or since the 6.1 percent recorded in November 2018, due to elevated oil and commodity prices arising from the impact of the Russia-Ukraine war and supply disruptions.
Inflation averaged 4.1 percent from January to May this year, exceeding the BSP’s two to four percent target range.
After delivering back-to-back rate hikes, the central bank’s Monetary Board also raised its inflation forecasts to five percent instead of 4.6 percent for this year, and to 4.2 percent instead of 3.9 percent for 2023.
This would breach the government’s two to four percent target in the next two years before easing back to within the range, averaging 3.3 percent in 2024.
BSP Deputy Governor Francisco Dakila Jr. earlier said that the adjustments were made due to the higher than expected inflation outturn in May, and the latest outlook may be pointing toward a high inflation number in June, also higher assumptions for oil and non-oil prices, as well as the approved jeepney fare hike.
Dakila said the BSP is now projecting global oil prices to average $106.30 instead of $100.04 per barrel for this year, and $95.30 instead of $89.50 for 2023.
He added that the BSP sees inflation averaging 5.6 percent in the second half of the year due to the continued rise in global commodity prices, as well as more pronounced second round effects on domestic goods and services.
“The forecast path also suggests that inflation is likely to remain above the target range until the first half of 2023 before decelerating thereafter, as both global oil and non-oil prices taper off,” Dakila said.
Source: https://www.philstar.com/business/2022/07/01/2192103/june-inflation-likely-quickened-57-65