Inflation projected to hit 6.5%
Inflation may have increased to as much as 5.7 to 6.5% in June as fuel, energy, and food prices continue to rise amid a declining peso, said Bangko Sentral ng Pilipinas (BSP).
Diesel prices jumped by as much as P6.55 per liter on June 7 while Meralco increased the cost per kilowatt-hour for the average household by P0.39. The Philippine peso also continued to weaken throughout the month, hitting a low of P55.06 to $1 on June 29.
However, BSP countered that cheaper fish and cooking gas prices may have limited the overall rise in inflation in the country last month.
In keeping with its price and financial stability mandate, the central bank said it would “continue to monitor closely emerging price developments to enable timely intervention to arrest [the] emergence of further second-round effects.”
Monetary authorities have so far ordered two 25-basis-point policy rate hikes in response to rising prices and new BSP Governor Felipe Medalla said more aggressive rate hikes could be ordered.
“The moment inflation becomes embedded, it becomes a self-fulfilling prophecy. I expect prices to rise and therefore I will raise my price,” he told reporters.
