The rate at which the cost of goods and services increase was expected to remain within manageable levels forthis month, the Bangko Sentral ng Pilipinas (BSP) said.
BSP Governor Benjamin Diokno said the government is looking at inflation for July to settle within the 2.2 to 3 percent range, coinciding with the government’s 2 to 4 percent target for the year.
The latest projection by the central bank is slightly higher with its month-ago outlook at a range of 1.9 to 2.7 percent.
According to Diokno, the BSP Department of Economic Research (BSP-DER) expects upside pressures to emanate from higher domestic petroleum prices along with the eyed hikes on rice prices.
“These increases are partly offset by slightly lower electricity rates in Meralco-serviced areas and the continued appreciation of the peso,” the BSP-DER said.
The BSP expects inflation to average at 2.3 percent for 2020, closer to the lower end of the government’s target and slightly above the current key policy rates of 2.25 percent.
“Going forward, the BSP will continue to monitor economic and financial developments to ensure that monetary policy settings remain consistent with the objective of price stability conducive to a balanced and sustained growth of the economy,” Diokno concluded.