A worker arranges LPG tanks at a distributor in Kamuning in Quezon City. -- Photo by Michael Varcas, The Philippine Star

Headline inflation likely further slowed in April due to lower electricity rates and easing food and cooking gas prices, the Bangko Sentral ng Pilipinas (BSP) said.

In a statement on Friday, the Philippine central bank said inflation likely settled within the 6.3-7.1% range in April, slower than the 7.6% in March.

If realized, inflation would surpass the BSP’s 2-4% target for the 13th consecutive month.

The lower end of the forecast range would match the 6.3% print in August 2022. It would also be the lowest inflation rate in 10 months or since June last year, when it stood at 6.1%.

“Lower electricity rates, the decline in prices of fish and vegetables, and rollback in LPG (liquefied petroleum) prices contributed to easing price pressures during the month,” the BSP said.

Manila Electric Co. (Meralco) earlier said the overall rate for a typical household went down P0.1180 to P11.3168 per kilowatt-hour (kWh) in April.
Oil companies also cut the prices of cooking gas products by around P9.18 to P9.20 per kilogram this month.

“Meanwhile, upward price pressures are expected to emanate from higher domestic petroleum prices, increased rice and meat prices, and peso depreciation,” the central bank said.

In April alone, pump price adjustments stood at a net increase of P2.9 per liter for gasoline, P1.1 per liter for diesel, and P2 per liter for kerosene.

The peso also returned to the P55-a-dollar mark in April. On Thursday, the peso closed at P55.72 on Thursday, down P1.36 or 2.4% from its P54.36 finish on March 31.

BSP Governor Felipe M. Medalla on Thursday said the Monetary Board may change the BSP’s full-year inflation forecast to 5.7% or 5.8%, lower than the previous forecast of 6%, at their next policy meeting.

This is due to the better-than-expected lower inflation rates in February and March, Mr. Medalla said in an ambush interview with reporters in Makati City.

“Going forward, the BSP remains prepared to respond appropriately to continuing inflation risks in line with its data-dependent approach to monetary policy formulation,” the central bank said.

Mr. Medalla earlier said if inflation eases further in April, the Monetary Board on May 18 will likely consider pausing its tightening cycle and keep rates on hold.

The BSP has increased borrowing costs by 425 basis points (bps) since May last year to tame inflation and stabilize the peso, bringing the key policy rate to 6.25% — the highest in nearly 16 years. – Keisha B. Ta-asan