Inflation likely saw an uptick in July as prices of rice and oil rose. — PHILIPPINE STAR/MICHAEL VARCAS

HEADLINE INFLATION likely settled at 2.2% to 3% in July, due to the uptick in prices of basic goods such as oil and rice, according to Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno.

“Upward price pressures were due to higher domestic petroleum prices as well as the uptick of rice prices for the month,” Mr. Diokno said in a Viber message to reporters.

Global oil prices continue to rise as demand gradually recovers with the lifting of restriction measures around the world.

On the other hand, factors that may have led to slower inflation include the slight decline in electricity rates in areas serviced by Manila Electric Co. (Meralco) as well as the recent strength of the peso.

Meralco said overall rates slipped by P0.1068 per kilowatt-hour in July as a slight increase in generation charge covering the June supply month was offset by a drop in other costs.

Meanwhile, the peso hovered around the P49-per-dollar level in recent weeks. On Thursday, it closed at P49.15, gaining four centavos against the Wednesday close of P49.19 and reaching its strongest level in more than three years or since the P48.95 close on Nov. 11, 2016.

Headline inflation picked up to 2.5% in June, after four straight months of slowing down.

The July inflation data will be released by the Philippine Statistics Authority on August 5.

The BSP expects inflation to average 2.3% and 2.6% for 2020 and 2021 – both well within its target range of 2-4%. — Luz Wendy T. Noble