BSP sees September inflation rising to within 6.4 to 7.4%

The Bangko Sentral ng Pilipinas (BSP) expects headline inflation for September to rise within the range of 6.4 to 7.4 percent as upside risks from the Middle East conflict, as well as elevated prices of select food items, persist.

“Upward price pressures for the month are likely to be driven by weather-related increases in the prices of vegetables, fish, rice and fruits,” the central bank said in a Wednesday morning statement.

“Increased domestic petroleum prices and depreciation of the peso could likewise contribute to higher inflation. These pressures could be partially offset by lower prices of meat and electricity rates.”

Headline inflation has eased for four consecutive months since April’s three-year high, settling at 6.1 percent in August and falling within the BSP’s projection range of 5.5 to 6.5 percent for the month.

However, tensions in the Gulf flared anew in September. Iran intensified attacks on commercial shipping near the Strait of Hormuz after the US sank five Iranian oil tankers, while a tanker carrying Iraqi fuel oil was hit and set ablaze. Saudi Arabia also shut its East-West oil pipeline after a drone attack, while Houthi forces intensified attacks around Saudi oil infrastructure and the Red Sea, adding risks to alternative export routes.

Last weekend, US President Donald Trump rejected Iran’s most recent proposal to reopen the Strait of Hormuz and halt regional fighting within seven days, prolonging uncertainty over the restoration of oil flows.