The Bangko Sentral ng Pilipinas (BSP) ruled out on Tuesday the likelihood for headline inflation to hit six percent in August after the rate actually rose rather steeply in July to 5.7 percent.

“Our best estimate at this point is that it won’t probably hit in the third quarter and it will not probably hit six percent. The word there is probably,” BSP Governor Nestor Espenilla Jr. told the reporters at the Economic Journalist’s Association of the Philippines forum on Tuesday.

He argued the steady deterioration of inflation to well past the four-percent ceiling was caused by transitory factors such as the adoption of higher excise tax on oil and sugar under the Tax Reform for Acceleration and Inclusion or TRAIN law in January.

According to him, the steadily up-trending inflation was caused by the “transitory impact” of the tax reform package.

He would not cite a number but Espenilla acknowledged that baseline figures indicate a shifting of price pressures in August than were indicated at the last meeting of the Monetary Board, the policy-making body of the BSP, in June.

The central bank chief also acknowledged that inflation were to remain elevated this year but should come down to within-target levels by next year.

Forecast inflation of 4.9 percent this year along with other figures is regularly reviewed and updated every six weeks.

“There’s a lot of uncertainty” that the BSP is watching out for. “We are hoping the inflation momentum will continue to lose steam which will then be in line with our forecast,” he said.

Further, he said the BSP is watching out inflationary pressures on various commodities.

Espenilla said inflation in July eased anew as consumer price index on education turned negative due to the free tuition program.

Also at the forum, Budget Secretary Benjamin Diokno said the government is committed to achieving upper-middle income status by 2022 and sustaining growth of seven to eight percent in terms of the gross domestic product over the medium term.

Given this, Finance Secretary Carlos Dominguez III said reduced income tax under the TRAIN law “will help us build a stronger middle class.”

He said, the Philippines remains one of the fastest-growing economies in Asia and that increased retail sales from year to date only “prove that Filipinos have more money to spend.”

At the forum, Diokno said the debt-to-GDP ratio, an indicator of capacity to pay down maturing obligations, stood at 42.1 percent in 2017 but should only improve to 38.6 percent of GDP by 2022.

The budget chief took the opportunity to explain that the hybrid approach to pursue President Duterte’s ambitious Build, Build, Build program is “quicker to mount and less expensive than the traditional PPP.”