BSP sees May 2024 inflation at 3.7% to 4.5%

MANILA – The Bangko Sentral ng Pilipinas (BSP) expects the May 2024 inflation to settle within the 3.7 to 4.5 percent range.

"Continued increases in electricity rates and vegetable prices alongside recent peso depreciation are the primary sources of upward price pressures for the month," the BSP said in a statement on Friday.

The Manila Electric Company earlier announced that power rates in May increased by PHP0.4621 per kilowatt hour to PHP11.4139 per kWh from PHP10.9518 per kWh in the previous month.

The peso, meanwhile, closed at 58.635 to a dollar on Thursday, its weakest performance since the 58.80 finish on Nov. 3, 2022.

The central bank, however, noted that lower prices of rice, fish, and fruits as well as lower domestic oil and liquefied petroleum gas (LPG) prices could offset the upside price pressures.

The latest data from the Philippine Statistics Authority (PSA) showed that at the national level, a kilogram of well-milled rice had an average retail price of PHP56.52 on May 15 to 17, slightly lower than the PHP56.98 per kg recorded in the same period in April.

Oil companies meanwhile slashed the prices of LPG products by more than PHP1 per kilogram.

"Going forward, the BSP will continue to monitor developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy decision-making," said the BSP.

The PSA is scheduled to release the May 2024 headline inflation data on June 5.

In April this year, headline inflation settled at 3.8 percent. (PNA)