BSP forecast: Inflation still likely to hover above target in June

Inflation is likely to have remained above target in June due to higher electricity and pump prices of petroleum products, based on the forecast of the Bangko Sentral ng Pilipinas (BSP) released Wednesday.

According to the BSP, inflation is likely to have settled within the 3.9% to 4.7% range this month, above the central bank’s 2% to 4% target range. Inflation clocked in at 4.5% in May.

The BSP attributed its forecast to higher prices of domestic petroleum products, along with the upward adjustment in electricity rates of the Manila Electric Co. (Meralco).

Gasoline, diesel, and kerosene prices were increased in all the weeks of June, while Meralco hiked rates by 7.98 centavos per kilowatt-hour to P8.6718/kWh.

The central bank noted, however, that upward movements could be partially offset by the decline in prices of key food items such as rice, meat, and fruits as it noted improved supply conditions.

“Moving forward, the BSP will continue to monitor emerging price developments to ensure that its primary mandate of price stability conducive to balanced and sustainable economic growth is achieved,” it said.

For the full-year 2021, the central bank last week hiked its inflation outlook to 4.0% from the previous forecast of 3.9%, accounting for higher global crude oil prices and a more favorable global growth outlook. — RSJ, GMA News