BSP Projects May 2024 Inflation to Range Between 3.7% and 4.5%

MANILA — The Bangko Sentral ng Pilipinas (BSP) has forecasted that inflation for May 2024 is likely to be between 3.7% and 4.5%. This projection was announced on Friday, highlighting key economic factors influencing the country’s price levels.

According to Philippines News Agency, the expected rise in inflation is driven primarily by increases in electricity rates, higher vegetable prices, and the recent depreciation of the peso. Specifically, the Manila Electric Company reported an increase in May’s power rates to PHP11.4139 per kilowatt hour, up from PHP10.9518 the previous month. Additionally, the peso weakened to 58.635 against the dollar, marking its lowest level since November 2022.

However, the central bank also noted potential mitigating factors that could temper inflationary pressures, including reduced prices for rice, fish, fruits, domestic oil, and liquefied petroleum gas (LPG). Recent statistics from the Philippine Statistics Authority indicate a slight decrease in the retail price of well-milled rice, while oil companies have cut LPG prices by more than PHP1 per kilogram.

The BSP emphasized its ongoing commitment to monitoring economic developments that could impact inflation and growth, maintaining a data-dependent approach to its monetary policy decisions. The Philippine Statistics Authority is scheduled to release the official May 2024 headline inflation data on June 5, following a recorded inflation rate of 3.8% in April.