The continued rise in oil prices and its impact on electricity rates is expected to drive mainly in June 2022 domestic inflation rate between 5.7 percent to 6.5 percent.
In a statement, the Bangko Sentral ng Pilipinas (BSP) said that higher prices of staple foods and depreciation of the peso were also among the inflationary pressures in the month.
These factors, however, are seen to be contradicted by lower prices of liquified petroleum gas (LPG) and fish, the BSP said.
The BSP added that it will continue to monitor price increases in the future to allow for timely intervention.
“Looking ahead, the BSP will continue to closely monitor emerging price developments to enable timely intervention to arrest emergence of further second-round effects, consistent with BSP’s mandate of price and financial stability,” the BSP said in a statement.
The expected inflation rate range for this month is higher than 5.4 percent in May, which is in turn the second consecutive month that the price increase rate has exceeded the government’s two to four percent target band.
The average inflation in the first five months of this year was 4.1 percent.
Financial authorities revised the central bank’s average inflation forecast for this and next year to 5 percent and 4.2 percent, respectively.
BSP projects 5.7% to 6.5% inflation rate on June
These were previously at 4.6 percent for 2022 and 3.9 percent for 2023.
Headline inflation rate in the Philippines rose further from 4.9 percent in April 2022 to 5.4 percent in May 2022. This was the highest recorded inflation since December 2018. In May of the previous year, inflation was lower at 4.1 percent.
The acceleration in the country’s inflation rate in May 2022 was primarily due to the higher annual growths in the food and non-alcoholic beverages index at 4.9 percent, and transport index at 14.6 percent.
Despite the increasing prices of commodities, the national Social Weather Survey of April 19-27, 2022 found 44% of adult Filipinos saying their quality-of-life will improve (termed by SWS as “Optimists”), 39% saying it will stay the same (“No Change”), and 4% saying it will worsen (“Pessimists”), in the next 12 months. The remaining 13% did not give an answer.
The resulting Net Personal Optimism score is +39 (% Optimists minus % Pessimists, correctly rounded), classified by SWS as very high (+30 to +39).