July inflation likely eased to between 2 and 2.8%
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Wed, 31 Jul 2019 16:18:35 +0000
INFLATION likely eased further to between 2 and 2.8 percent last month on the back of reduced rice, fuel and power prices, the Bangko Sentral ng Pilipinas (BSP) reported on Wednesday.
In a statement, the central bank said its Department of Economic Research projected consumer price growth “to settle within” that range last month, lower than 5.2 percent in the same month in 2018.
Headline inflation slowed to 2.7 percent in June from 3.2 percent in May.
The Philippine Statistics Authority is set to release official July inflation data on August 6.
The BSP said “lower rice and domestic LPG (liquefied petroleum gas) prices, along with [the] downward adjustment in electricity rates and the recent peso appreciation, are seen to temper inflation pressure during the month.”
Latest PSA data show that prices of the staple decreased in the second week of July, with the average wholesale price dipping by 0.3 percent from P39.08 per kilogram the week before.
Energy companies, meanwhile, implemented a per-kilogram price rollback of P3.36 to P3.40 for LPG effective July 1.
On the other hand, the Manila Electric Co.’s per kilowatt-hour (kWh) rate for households consuming 200 kWh monthly was trimmed by P0.1068 last month.
The local currency hit its strongest level so far this year on July 30, closing P50.89 against the US dollar.
“These could be partly offset by higher prices of petroleum and food items during the month,” the Bangko Sentral pointed out.
According to the Department of Energy, most oil companies implemented a per-liter price increase of 25 centavos for gasoline, 20 centavos for diesel and 40 centavos for kerosene effective on July 23.
“Looking ahead, the BSP will remain watchful of evolving inflationary environment to ensure that the monetary policy stance remains consistent with the BSP’s price stability mandate,” the central bank said.
The Bangko Sentral started easing its monetary policy settings on May 9, reducing interest rates by 25 basis points. It, however, decided to take a “prudent pause” on June 20 and kept its overnight borrowing, lending and deposit rates at 4.50 percent, 5.00 percent and 4.00 percent, respectively.
Despite the pause, monetary authorities cut their 2019 inflation forecast to 2.7 percent from 2.9 percent, and their 2020 projection to 3.0 percent from 3.1 percent.