HEADLINE INFLATION likely eased further to settle between 1.9% and 2.7% in April, with downside risks mainly coming from plunging oil prices, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said on Thursday.

“The progressive fall in inflation will continue,” Mr. Diokno said in a Viber message to reporters, citing the inflation estimate range from the BSP Department of Economic Research.

Headline inflation settled at 2.5% in March, down from the 2.6% print a month prior to mark the second consecutive month of easing prices. This brought the year-to-date average to 2.7%, which is within the 2-4% target of the BSP.

Mr. Diokno said earlier this week that inflation could average at 2% this year, down from the previous forecast of 2.2% given in March.

The Philippine Statistics Authority (PSA) will report April inflation data on May 5.

The plunge in global oil prices may have offset upside risks to inflation last month, according to the central bank chief.

“The collapse in oil prices is expected to moderate inflationary pressure coming from higher prices of rice and other food items along with upward adjustment in electricity rates in Meralco (Manila Electric Co.)-serviced areas,” Mr. Diokno said.

“Looking ahead, BSP will remain watchful of economic and financial developments here and abroad to ensure that monetary policy settings remain consistent with price stability conducive to a balanced and sustainable economic growth,” he said.

Oil prices have plunged since early March as demand collapsed amid the coronavirus disease 2019 (COVID-19) pandemic. US oil prices even slid into negative territory in mid-April.

But oil rebounded later in the month after some members of the Organization of the Petroleum Exporting Countries vowed to cut production by 10 million barrels per day starting May.

Meanwhile, the farmgate price of palay, or unmilled rice, rose 4.7% week on week to P17.48 per kilogram in the first week of April, with prices down 6.5% year on year, according to the PSA.

In its weekly update on palay, rice and corn prices, the PSA said the average wholesale price of well-milled rice rose 2.96% week on week to P38.59 per kilogram while the retail price went up 2.19% to P42.40.

The average wholesale price of regular-milled rice jumped 2.39% to P34.14 per kilogram while the average retail price increased by 1.35% to P36.86.

On the other hand, consumers in Metro Manila will likely see higher electricity bills in April, Meralco said early last month.

Meralco said the overall electricity rate rose by P0.1050 per kilowatt-hour (kWh) to P8.9951/kWh from March’s P8.8901/kWh. Households consuming 300 kWh, 400 kWh, and 500 kWh could expect their monthly bills to rise by P31.50, P42.00, and P52.50, respectively.

The central bank last month cut benchmark rates by 50 basis points in an off-cycle meeting to support economic activity amid the COVID-19 outbreak, saying a slower inflation outlook amid falling oil prices is supportive of this dovish stance.

This brought the key rate or the overnight reverse repurchase rate to 2.75%. Accordingly, interest rates for the central bank’s overnight deposit and lending facility have been trimmed to 3.25% and 2.25%, respectively. These rates are the lowest on record and also since the BSP shifted to an interest rate corridor in 2016.

Mr. Diokno earlier this week said further monetary easing through rate cuts and reduction in banks’ reserve requirement ratios remain on the table to ensure economic stability amid the COVID-19 crisis. — L.W.T. Noble