By Melissa Luz T. Lopez, Senior Reporter
INFLATION remained elevated in June given higher prices of rice and crops as well as cooking gas, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.
In a statement, the BSP Department of Economic Research said inflation likely clocked in between 4.3-5.1% this month. This compares to the central bank’s 4.6-5.4% forecast range given for May, which eventually clocked in at 4.6% — the fastest pace in at least five years.
The Philippine Statistics Authority (PSA) will release latest inflation data on Thursday.
“Upward price pressures from rice and other agricultural commodities due to weather-related disruptions as well as the increase in LPG (liquefied petroleum gas) prices could be partly tempered by the reduction in fuel prices and electricity rates in Meralco-serviced areas,” the BSP unit said.
Farmgate prices for unmilled rice rose in the second week of June ahead of the so-called lean months in between harvest seasons, the PSA said in a report.
Typhoon Domeng (international name: Maliksi) and tropical depression Ester (Gaemi) coupled with a southwest monsoon also hit parts of the country earlier this month, bringing heavy rains and flooding in a number of provinces and dampened farm output.
A price hike for liquefied petroleum gas (LPG) products was also implemented this month. In contrast, retail pump prices declined over the past week, mirroring movements in the world crude market, according to the Department of Energy.
Power distributor Manila Electric Co. (Meralco) also announced a P0.1252 per kilowatt-hour reduction in utility rates, marking the second straight month of declines due to lower generation and transmission charges.
Prices of goods and services have picked up by 4.1% for the first five months, versus the government’s 2-4% target for the entire year. In turn, the BSP decided to introduce back-to-back rate hikes in May and June to rein in future inflation and keep prices competitive.
The BSP has conceded to missing this year’s goal as inflation is seen at the 4.5% level for the full year, with policy makers setting sights on tempering price spikes back to target by 2019.
Looking ahead, the BSP said it will “continue to keep a watchful eye” on price developments in order to keep the financial system stable and economic growth robust.